The massive corporate loss incurred by the Caribbean’s largest bank in the first half of 2020, has begun reversing, but directors have decided against paying a shareholder dividend this quarter.
CIBC FirstCaribbean International Bank (FCIB) recently released its half-year financials for the period ending April 30, and the picture looks much better with the bank recording a US$53.52 million (BDS $107.04 million) net profit.
For the comparable six-months period last year, FCIB registered a US$58.26 million (BDS$117.52 million) loss on the regional operations.
Of interest, was the fact that the bank, which is headquartered in Barbados, generated less revenue during the first half of this year (US$271.82 million) than it did for the comparable period in 2020 (US$301.05 million).
In the Chief Executive Officer’s Review, which accompanied the financials, CEO Colette Delaney said the COVID-19 pandemic “continues to have an adverse impact on the near-term economic outlook for the regional economy”.
She cited restrictions imposed by Caribbean governments to limit the spread of COVID-19, such as travel restrictions, physical distancing measures, and the closure of certain businesses. This she said, “continued to disrupt markets; and will limit the scope and pace of the economic recovery, until effective vaccination programmes are widely in place across our operating territories”.
Delaney said FCIB had net income for the second quarter of US $22.6 million (BDS $45.2 million), up by US $132.3million (BDS $264.6 million) or 121 per cent from the second quarter a year ago.
“Results for the quarter,” she told shareholders, “were affected by one item of note related to a US$10.1 million restructuring charge associated with ongoing efforts to transform our cost structure and simplify our bank.”
She disclosed that for the second quarter, the bank provisioned much less for credit losses, but this was offset by lower revenue from the reduced interest rate environment.
The FBIC chief executive cautioned that there remained a great deal of uncertainty in the market caused by the COVID-19 pandemic. “The directors have decided not to declare a dividend this quarter and will continue to monitor the bank’s financial performance along with market conditions.
“The bank’s Tier 1 and total capital ratios are 12.7 per cent and 14.8 per cent respectively, which remain in excess of applicable regulatory requirements,” Delaney said in her statement.
She noted too that FCIB “continues to execute its strategy to provide clients with a modern, digital experience, simplifying the way in which we do business, while positioning the bank for client-focused growth”. (IMC1)