The steep fall in the corporate tax rate has boosted profits for Republic Financial Holdings Ltd (RFHL) by about a fifth, reaching US$0.24 billion for the financial year ending September 30, the Trinidadian banking giant has reported.
Republic gained an extra US$38.66 million or 19.5 per cent over the profit of US$0.20 billion for the previous financial year, it said.
Announcing the results in a statement, RFHL chairman Ronald Harford said the result included “two significant one-off items, the net impact of which increased by US$12.5 million”.
He said: “Firstly, the bank in Trinidad and Tobago amended the terms of its post-retirement medical benefit plan in line with market, resulting in a write back net of deferred taxes of US$41.21 million.
“Secondly, Barbados reduced its corporation tax rate from 30 per cent to a range between one per cent and five per cent, which resulted in a charge to our income statement of US$28.71 million due to the remeasurement of deferred tax assets at the lower tax rate.”
The banker explained that excluding the impact of these items, the financial group’s core profit was US$0.22 billion, an increase of US$26.17 million or 13.2 per cent more than the 2017-2018 financial year.
The increase in core profit was driven mainly by subsidiaries Cayman National Corporation (US$13.86 million) and the RBL Trinidad and Tobago Group (US$5.87 million).
Up to September 30, RFHL’s total assets stood at US$13.1 billion, up by US$2.54 billion or 24.2 per cent year on year.
Harford said the group continues to progress with its strategy of acquisition and diversification of income sources.
In March, RFHL’s subsidiary, Republic Bank Trinidad and Tobago (Barbados) Ltd, acquired 74.99 per cent shares in Cayman National Corporation (CNC), increasing RFHL’s asset base by US$1.66 billion.
On November 1, the group completed the acquisition of Scotiabank’s banking operations in St Maarten, Anguilla, Dominica, Grenada, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines.
Harford said: “On a pro-forma basis, the acquisition will add 350 team members to our staff complement, US$1.51 billion to total asset size and we anticipate net profits in the region of US$20 million.”
Welcoming the new addition to the group’s portfolio, Harford said the outlook for the economies in which the financial institution operated were “generally positive and we expect continued growth in our subsidiaries in those territories”.
“This combined with our recent acquisition of CNC and completion of the acquisition of Scotiabank’s operations in the Eastern Caribbean and St Maarten, and the implementation of a number of efficiency initiatives will boost profitability over the coming years,” said Harford.
In what would be his last end-of-year financial statement at the helm of the firm, Harford also announced his retirement from the board of directors of Republic Bank Ltd and RFHL effective December 31.
Vincent Pereira, who was, appointed to the board of Republic Bank Ltd on July 1, was made the chairman-designate for both companies come 2020.