António Francisco Vitor

 Prezidente Konsellu Administrasaun


The Board of BNCTL is pleased to submit its 2019 Annual Report.  The performance of the bank in 2019 offered a reasonable return and a moderate growth despite difficult economic conditions. BNCTL’s assets grew by nearly 10% and delivered a return on equity (ROE) of 6.58% and a return on asset (ROA) of 1.19%.  The net income for 2019 was $2,139,763 which is a 14.7% increase over 2018.

The Government of Timor-Leste is the primary contributor to the economy of the country.  The performance of BNCTL is reasonable considering the political impasse of 2019, lack of a state budget and the impact it had on the macro economic conditions of Timor-Leste.

 COVID-19 is introducing additional challenges to the economy of Timor-Leste in 2020. The National Parliament failed to pass the 2020 state budget and public spending continues to follow the duodecimal regime. Investment and projects loans are limited under duodecimal regime. After slight growth in GDP in 2019, the Timorese economy is expected to shrink again in 2020, making this year the 3rd year in 4 years with shrinking economy.  These factors have impacted the performance of the bank and expectation for 2020 needs to be moderated given the conditions. 

Mitigating and managing the inherent risk of providing banking service in Timor-Leste is a challenge given the existing issues with land laws and contract laws.  BNCTL will continue to advance provision of services through innovative products and services to serve the people of Timor-Leste. 

In 2019, BNCTL decided to introduce insurance backed loan products in order to support and make financing available for many Timorese who otherwise would not qualify for the loans. These products were introduced in 2020 making financing available for more people and reducing the interest rate on loans for people with good credit history.

Managing BNCTL’s performance in 2019 required a strategic shift during the year, BNCTL focused on consumer loans to cover potential gaps in project and investment loans due to lack of state budget. BNCTL implemented policy to put emphasis on cash flow in addition to collateral to make loans available to public. BNCTL introduced new services to raise fee-based income. Additionally, in 2019, BNCTL was able to reap the benefit of efficiency in operations that was made possible through investment in core banking system and through digitalization of the bank.

BNCTL continues to pursue its strategic targets and is making a steadfast progress on non-financial as well as financial targets. The Strategic goals of BNCTL for 2020 is outlined in Goals For 2020 and beyond section of this report.

This report includes the financial data as of 31st December 2019 and non-financial information.  The audit financial statements are in Financial Reports section of the annual reports.  The External Auditor’s issued a “qualified opinion” for 2019 as BNCTL is yet to adopt the recently introduced IFRS 9 and IFRS 7 standards.  I bring to your attention that the application of IFRS 9 and IFRS 7 yet to be made mandatory by the Central Bank (BCTL).  BNCTL has been transparent with BCTL and in contact with BCTL regarding IFRS 9 implementation.  The notes to the financial statements make it transparent that BNCTL’s current accounting policies are not in accordance with IFRS 9.