COVID-19 bites into CIBC FCIB net income

The impact from the COVID-19 pandemic has resulted in a whopping 40 per cent decline in net income for the Barbados-based FirstCaribbean International Bank Ltd for the three-month period ending January 31, 2021.

The bank said in its latest financial statement, signed by Chief Executive Officer Colette Delaney, that net income for the review period was US$30.9 million, a reduction of US$20.5 million or 40 per cent, versus the same period in the prior year.

“The impact of the COVID-19 pandemic continues to affect the interest rate environment as well as levels of business and economic activity in the region, which has contributed to overall lower revenue in the first quarter of 2021,” Delaney explained.

The bank’s capital ratios remain strong, which is in excess of the applicable regulatory requirements. Delaney said although there have been some positive signs in the first quarter, the current environment and the path to recovery remained uncertain.

As such, she said “similar to the last quarter, the directors have decided not to declare a dividend and will continue to monitor the effect of COVID-19 on economic growth throughout the region”.

Canadian Imperial Bank of Commerce (CIBC) currently owns majority stake in CIBC FirstCaribbean International Bank, and had announced in November 2019 that it had agreed to sell a large portion of its holdings in the bank to GNB Financial Group Ltd
for US$797 million.

However, early last month Canadian regulators did not grant the necessary approvals.

In her report, Delaney said this transaction which would have seen GBN Financial Ltd acquiring 66 and 2/3 per cent of the shares in CIBC FirstCaribbean International Bank would have supported the bank’s long-term growth prospects, adding that it would have been “only one way of supporting growth going forward”.

“CIBC has held a majority ownership stake in FirstCaribbean for a number of years, and there exists an excellent working relationship with a shared focus on meeting the needs of our clients.

“We remain focused on delivering on our strategy and continuing to support our clients during these times,” said Delaney, as she expressed gratitude to clients, employees, shareholders and directors for their support. (PR)