First Caribbean International Bank reported a big loss of US$151 million, a huge increase from a loss of just US$22 million in 2013. The news may appear gloomy but there is more to that than meets the eye. The news may well be a strong signal that its time to buy shares of this bank that sprawls over the wider Caribbean region.
Management cleaned shop, resulting in loans loss provision climbing 36 percent to US$206 million in 2014 and impairment cost relating to intangible assets of US$115 million. The latter should not repeat in the near term and loan loses may remain subdued with the heavy write off in 2014.
The October 2014 quarter enjoyed a major turn-around in fortunes as after-tax profit rose to US$24.6 million from a loss of US$66 million in 2013. The quarterly result was helped by a sharp drop in loan loss provision, falling from US$76 million in 2013 to US$13 million and operating expenses declining from US$130 million to $88 million. The July quarter also showed positive results, amounting to US$23 million after tax, suggesting that profit could be back on track.
Net interest revenues were down 1 percent for the year, but fell 7 percent in the October quarter, from the similar quarter, in 2013 as revenues fell 6 percent and interest cost was down by 5 percent. Other income fell in the quarter moderately, but was up for the year, by 2 percent. How will the bank grow its income, is the challenge going forward in the medium term, in a region that is suffering from economic stagnation and beset by high levels of national debt?
Customer deposits ended at US$9.2 billion from $9.8 billion at the end of the 2013 fiscal year while loans fell to US$6.14 billion from US$6.33 billion in 2013 and as high as US$6.83 billion at the end of the 2012 fiscal year. The bank’s balance sheet contracted during the year to $10.78 billion from $11.4 billion in 2013 due mainly to contraction in cash balances and loans but investment securities rose from $2.2 billion to $2.3 billion.
A final dividend of 1.5 US cents per share payable in January, was declared, it brings the total for the year to 3 US cents. The stock is listed on the Barbados and Trinidad and Tobago stock exchanges.
First Caribbean 2014 profit disappears
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[…] hands for a value of $3,069,907 as the stock gained 2 cents in closing at $2.92. Declines| Firstcaribbean International Bank traded 1 cent lower, with 2,058 units and closed at $5. National Commercial Bank traded 8,000 shares […]
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[…] 18,346 shares traded. Firm Trades| Stocks closing with prices unchanged at the end of trading are, Firstcaribbean International Bank with 10,150 shares changing hands and closed unchanged at $5.03, First Citizens Bank contributed […]
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[…] increased by 0.11 points to end at 44.74. Gains| Stocks increasing in price at the close are, Firstcaribbean International Bank ended trading with 937 shares but added 2 cents to close at $5.03, First Citizens Bank traded 2,165 […]
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[…] First Caribbean International Bank profit rose in the first quarter ending in February, but this was mainly due to reduction in loans loss provisioning. Loans declined and so did interest earned on loans. Loans fell to US$5.996 billion down from $6.28 billion in January 2014 and $6.14 billion at the end of October last year. The bank, operating across the Caribbean region, reported interest income of US$108.7 million for the latest quarter. In 2014, interest income was $116.6 million. Other operating income of $41.8 million was earned in 2015 versus $42.5 million in 2014. The bank enjoyed a better loan loss experience with a charge of $15.7 million, in the latest quarter compared to $30.6 million in 2014. Operating expenses declined to $85 million from $89 in 2014. The bank profit after tax amounted to $26.6 million versus $15.4 million for 2014. The bank needs to increase quality loans if it is to have enjoy sustainable growth going forward, this is a difficult challenge for a bank operating across an economically distressed region. At a price of TT$5.03 the stocks trades around 10 times current year’s earnings and that is lower than the other banking stocks on the Trinidad Stock Exchange. […]
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[…] increased by 0.24 points to end at 41.50. Gains| Stocks increasing in price at the close are, Firstcaribbean International Bank traded 1,100 shares to close with a gain of 1 cent, at $5.03, Grace Kennedy closed with 3,200 […]
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[…] by a mere 0.08 points to end at 41.57. Gains| Stocks increasing in price at the close are, Firstcaribbean International Bank closed with a volume of 27,636 shares trading, valued at $138,733, to close 2 cents higher at […]
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[…] 20 advanced, 14 declined and 1 traded firm. Gains| Stocks increasing in price at the close are, Firstcaribbean International Bank gained 25 cents to end the day at $5 while trading 5,730 shares. L.J. Williams B shares contributed […]
[…] FirstCaribbean Bank, a subsidiary of CIBC Canada, is set to exit banking activities in Belize the Central American country with lots of land and a small population of 268,000. “The bank entered into an agreement on August 3, 2015 to sell its net assets in Belize to a local banking institution, Heritage Bank Limited. At July 31, 2015, assets for the Belize operation totalled US$169 million, while total liabilities were US$140 million”, FirstCaribbean said in a note to their July interim financials. The bank currently operates 5 branches in the country. Upon the completion of the sale and related wind-up activity the Bank will discontinue its operations in Belize. The transaction is subject to approvals from the Central Banks of Belize and Barbados, along with other related governmental authorities. The transaction is not expected to have a material impact on the Bank’s capital ratios, the FirstCaribbean report stated. The sale will make a huge difference to the acquiring bank as the acquired assets will more than double its size. Heritage Bank had assets of Belize $244 million at the end of 2012 which fell to $204 million at the end of 2013, with deposits falling from $228 million at the end of 2012 to $187 million and cash declining from $110 million to $57 million. The bank made a profit of $1.76 million in 2013 after tax and $2.2 million in 2012 but had accumulated deficit of $21 million with net equity of $14 million at December 2013. It takes two Belizean dollar to purchase one US dollar. Heritage has 10 branches in Belize according to information on their website. […]