BayTrust Rebounds from Global Financial Crisis

BayTrust Rebounds from Global Financial Crisis

BayTrust’s Annual Report to 31 March 2010 shows a stunning turnaround from the previous year’s result.

In the year to March 2009, the Trust lost $19 million on its investments as the Global Financial Crisis (GFC) savaged its investments portfolio. But this year, the Trust has recovered all that and more to post investment gains of over $30 million.

In the year to March 2009 the Trust made a loss of $20.5 million but in the latest year it has turned that around to a surplus of $29 million.

BayTrust Chair Paula Thompson said the rebound was a huge relief to Trustees and staff.

“2009 was a truly horrible year for investments,” she said, “and although we always had faith that the markets would recover, that faith was severely tested by the length and depth of the GFC.”

In the year to March 2010 BayTrust paid grants totalling $1.576m to over 100 community groups throughout the Bay of Plenty.

In addition, BayTrust’s Dillon Scholarship programme paid over $91,000 to 43 tertiary students with disabilities.

During that period also, the Trust recommitted to further three-year funding programmes for Sport Bay of Plenty’s CoachForce and the Rotorua-based BayTrust Rescue Helicopter.

The Trust, formed in 1988 to provide grants based on the earnings of TrustBank shares, has developed an investment fund of $90 million in 1996 into a pool of more than $137 million through a balanced and diversified investment programme, while maintaining a grants programme that has averaged $2.7 million a year since 1997.

Ms Thompson said that because BayTrust is an “enduring” Trust, i.e. in theory it goes forever, it is important that the original capital is protected against inflation, and to this end a further $2.4 million was added to the Inflation & Population Reserve for the period under review.

The Trust also transferred $9.1 million into its Income Fluctuation Reserve which had been fully depleted by the previous year’s results.

Ms Thompson also said that investment market volatility was a problem that the Trust had chosen to live with. “We could avoid all that volatility,” she said, “by just keeping all our capital in the bank, but that would certainly not allow us the gains and granting programmes we have experienced over the past 20-plus years. In the long run, appropriate and calculated risk-taking is rewarded, and ultimately those rewards go to deserving Community groups.

During the year under review BayTrust created the new role of Community Development Advisor and ex-Trustee Terri Eggleton was the successful applicant, commencing duty on 1 October 2009.

This position provides a renewed focus on Community Development as the key means by which it will achieve its mission of effectively building, strengthening and enhancing BoP Communities.

The Trust is releasing its Annual Report as inserts in local Bay of Plenty papers this week. The full set of Annual Accounts including the Auditors’ opinion is available here.

BayTrust’s Annual Public Meeting will be held at the Suncourt Hotel & Conference Centre in Taupo on Thursday 19 August, commencing at 2.30pm.