For the fiscal year ending October 2013, First Caribbean International Bank generated $530 million in revenue, down from $543 million in 2012 but reported lousy net results of a loss for the year of $27.5 million compared with a profit of $72 million in the prior year.
The Bank would have generated $29.6 million of net income for the year but results were affected by a number of factors. Of note they incurred $37.6 million ($35.5 million after-tax) of restructuring expenses and an increase in the collective allowance for loan losses of $25 million ($21.6 million after-tax). The bank took a $151 million loan loss hit, an increase from $120 million in 2012. The 2013 write off is 2.4 percent of the net loan of $6.3 billion with loans falling from $6.8 billion in 2012.
FCIB saw operating expenses going in the opposite direction to income as expenses grew from $348 million in 2012 to $403 million but the 2013 amount would include the restructuring cost mentioned above.
Total assets also declined to $11.4 billion from $11.5 billion in 2012. Customers’ deposits remained at $9.6 billion, roughly the same as the year before. (All figures are in US dollars).
The bank, in its report to shareholders, states that “Many of the economies in which we operate rely heavily on tourism and foreign direct investments. The overhang from the economic crisis continues to impede growth and by extension has negatively affected our results. Loan loss provisions this quarter were higher than normal and include an increase in the collective allowance. The Bank is focused on pursuing risk-controlled growth and has taken considerable steps during the year toward the goal of becoming a lower risk bank. While never easy in these difficult times, we have also taken the decision to right size the organization, to redefine how we operate and to address our cost structure. The restructuring we are undertaking will position us for future cost savings and give us the ability to serve our customers better. As we continue to pursue our strategic priorities, our Bank has recorded some significant successes this year. We have introduced new and relevant products to better serve our clients and continue to leverage the capabilities of our parent and majority shareholder, CIBC.
Our focus on addressing operational and administrative concerns has also led to improvements in the client experience”.
“Our Wholesale Banking segment has recorded significant strides in client service delivery. During 2013, we have significantly removed operational and administrative activities away from the front-line personnel to ensure Corporate Managers and Client Service Officers allocate more time to work and interact with, and provide solutions to clients. We have also streamlined and strengthened our credit adjudication processes to further enhance efficiency. In our Retail and Business Banking segment we have invested heavily in developing a series of products and services to enhance our customer experience”.
The bank states that, “We have also continued our investment in upgrading our branches and network of Instant Teller machines. Focusing on customer experience, we have expedited our account opening times through an innovative continuous improvement process. In the Wealth Management segment we have leveraged the strong Axiom Mutual Funds capability in our parent and majority shareholder, CIBC, to manufacture a Caribbean based version of these funds suitable for international investors who have funds and wealth managed through the Caribbean. We have also strengthened our capability to service our Wealth Management clients with the integration into our bank of the CIBC Bank & Trust business, located in the Cayman Islands and the Bahamas, further widening the scope of clients we can assist and the range of services we can provide”.
A final dividend for the year of $0.015 per share was declared. With some of the cost not likely to recur and reduction in others flowing from the restructuring, profits should pick up in 2014 if the asset base can be held and no more major loan write down.
National Commercial Bank
