FirstCaribbean to inject $4 billion into Jamaican subsidiary

IRSTCARIBBEAN International Bank Limited (FCIB) is planning to accelerate growth in its Jamaican operations as it plans to inject US$25 million ($3.85 billion) in new capital to facilitate these ambitions.

This was announced by FCIB Chief Executive Officer Mark St Hill on Friday at the 30th annual general meeting (AGM), which was held virtually. The move comes as the regional bank looks to focus on its remaining 10 core markets, especially with respect to Jamaica and Trinidad & Tobago whose populations account for 80 per cent of the English-speaking Caribbean.

“I am absolutely pleased to announce that yesterday the board also supported our strategy for delivering growth in the Jamaican market, which we have already started to see. We have approved an additional capital injection into the Jamaica market, and that will allow us to fuel continued growth. Already we are seeing some phenomenal performances. Actually, if we take our personal and business banking franchise, in terms of percentage growth, it grew the most of our 10 countries, with the highest growth of 14.4 per cent,” St Hill responded in a positive tone.

FCIB (Jamaica) Limited only accounted for 7.81 per cent of FCIB’s US$858.44-million consolidated revenue, and a mere 7.13 per cent of FCIB’s US$15.16-billion consolidated asset base in 2023. Thus, Jamaica is the fourth-largest market by revenue and assets while trailing Barbados, The Bahamas, and Cayman Islands.

FCIB Jamaica’s financial performance in 2023 saw its interest income climb 44 per cent to a record $9.79 billion, which was underpinned by its loans and advances portfolio that rose 30 per cent to $7.27 billion. After accounting for other operating income, FCIB Jamaica’s total operating income was up 15 per cent to $10.20 billion. Its profit before taxation increased 57 per cent to $1.82 billion, with net profit coming in at $1.13 billion.

FCIB Jamaica last had profit before tax exceeding $1.23 billion in 2018, with 2008 and 2009 being the last two consecutive years when this figure exceeded $1.1 billion.

FCIB Jamaica’s total assets improved 14 per cent to $163.02 billion, with loans and advances moving to $88.94 billion at the end of October 2023. Its total liabilities grew 16 per cent to $148.93 billion, with deposits at $145.69 billion and equity/capital of $14.08 billion.

“Our focus now is on key markets where we are not number one or number two; we have a number of initiatives there that are going to accelerate that growth in the coming months. We are pleased at the efforts that we are making. We believe we have the right initiatives in place, and we can assure you that Jamaica, along with Trinidad, remain two areas of significant focus for growth [in] 2024 and beyond,” St Hill expounded on the greater plans for Jamaica.

He even emphasised that the Jamaican corporate and investment banking segment was reported to have improved by six per cent while winning key deals in the market.

FCIB Jamaica is currently the sixth-largest Jamaican commercial bank, with FCIB Chief Financial Officer Carl Lewis noting that the bank is ready for the implementation of Basel III whenever the change takes effect by the Bank of Jamaica (BOJ). As such, the expected capital injection into the Jamaican bank will further strengthen its capital position and give it space to improve its lending capacity. FCIB Jamaica’s total capital ratio was 15.94 per cent at the end of October 2023, which would have been strengthened further by the transfers of $480.77 million into its statutory and retained earnings reserves in the first quarter.

According to the BOJ’s December 2023 statistics, FCIB Jamaica’s total assets hit $173.16 billion, with loans and advances at $94.47 billion. Total liabilities were $158.85 billion, with capital rising to $14.32 billion. This is compared to the $2.47 trillion in commercial banking assets built up of $1.25 trillion in loans, and $2.17 billion of total liabilities supported by about $1.7 trillion in total deposits.

FCIB has been working extensively on building out its digital capabilities across the region. Its digital loan store processed nearly 10,000 applications across the region, with about 70 per cent of its customers now banking online. This is complemented by initiatives like 1stPay which allows FCIB customers to use a QR code or email to send funds without the need for additional banking details.

“We had launched our remote cheque deposit product in The Bahamas, St Lucia, Antigua, St Kitts, and also in Cayman. The legislation we’re referring to, in terms of where we haven’t launched in other markets, refers to a legislation [that] allows for a full truncation and exchange of images between banks,” said FCIB Chief Information Officer Esan Peters on the mDeposit feature which processed 10,670 cheques in 2023.

FCIB’s stock price on the Trinidad & Tobago Stock Exchange (TTSE) closed Friday at TT$7.05, which leaves the stock up 0.14 per cent in 2024 with a market capitalisation of TT$11.12 billion (J$253.58 billion). FCIB declared a dividend of US$0.0125, totalling US$19.71 million, to be paid on April 25 to shareholders on record as of March 27.

The Jamaican business rebranded on January 31 to CIBC, which reflects the wider group shift to align with the parent company. The resolution approving the name change of FCIB to CIBC Caribbean Bank Limited was approved on Friday, along with all other resolutions. The Canadian Imperial Bank of Commerce (CIBC) is the largest shareholder in FCIB, with it being a 91.67 per cent subsidiary.

“The countries that we’re not number one or number two [in], what we have been saying is that we have significant opportunity to grow the franchise — and these are not in markets that are US-denominated; we have a clear strategic focus of where we need to go. We are also saying that even in the core countries that we are in, our significant investment in modernising and simplifying the platform is also driving accelerated growth. We believe a combination of these factors will deliver continued growth,” St Hill closed.