“Pray for the police.”
This was the advice given to the grieving family members of Sona Lalloo at her funeral service yesterday.
RBC, during its first quarter (Q1) 2014 results call on Wednesday, said restructuring in the Caribbean is costing the company over US$123 million: US$60 million loss on the sale of RBC Jamaica to Sagicor, plus US$63 million related to post-employment benefits and restructuring charges in this quarter and the previous, and US$40 million in foreign exchange translation loss from the RBC Jamaica sale. RBC Caribbean is headquartered in Port-of-Spain. RBC chief financial officer Janice RFU Kakusa said on the call: “We had first quarter earnings of over US$2 billion, up US$45 million or two per cent from the prior year, and relatively flat from last quarter. Earnings were up US$137 million, or seven per cent from last year, excluding the specified items outlined on Slide 29, which include the previously announced US$60 million loss on the sale of RBC Jamaica, and after-tax provisions related to post-employment benefits and restructuring charges in the Caribbean of $32 million this quarter and $31 million last quarter.”
She added: “Caribbean and US banking had a loss of US$66 million this quarter, resulting from the specific items I discussed earlier. We also expect to record a loss on foreign exchange translation when the sale of RBC Jamaica closes. The cumulative unrealised translation loss was US$40 million as at the end of our first quarter. As Gord mentioned, we’re focused on improving the performance and competitiveness of our Caribbean operations for the long term.” Gordon M Nixon, chief executive officer and director of RBC said: “As you can see from our results, we had a solid start to the year. Earnings were US$2.1 billion or US$2.2 billion, up seven percent from last year, when you exclude the loss on sale of our Jamaican bank and the provisions incurred in our Caribbean operations. “And our return on equity was just under 19 per cent on the same basis. Revenue was up eight per cent from last year, and our results reflect continued strength in Canadian banking and higher earnings in capital markets, investor and treasury services and wealth management.”
Nixon took “a few minutes to discuss our Caribbean banking business,” during the call. “We have mentioned before, we have been navigating through challenging economic and marketing conditions in the region over the last couple of years. We’ve been focusing on managing the business to drive better performance, and recently completed a comprehensive review of our operations across the Caribbean, to find ways to operate more efficiently and to ensure that we are able to be a competitive leader in the markets where we want to do business. “As part of that review, we recently announced that we are selling our banking operations in Jamaica, a country where we did not have scale or a market-leading position necessary to compete effectively over time and to meet our hurdle rates of return. “We are also restructuring our operations by consolidating certain branches, reducing our workforce and streamlining our head office structure. These are important steps in repositioning the business, and we believe that these changes will improve our performance and competitiveness while driving efficiencies.
“The decision to restructure our Caribbean business was a difficult one, but one that will allow us to focus our efforts on those markets in which we can be a leading financial institution and operate on a sustainable basis with good returns. “As I’ve said before, we’ve operated in the region for over 100 years. We remain committed to the region, and we are excited about the long-term prospects. And even this quarter, our core results continue to strengthen.” Mark Richard Hughes, RBC’s deputy chief risk officer, told the call that in the Caribbean, provisions on impaired loans were US$16 million, down US$10 million from the previous quarter, largely driven by lower provisions in the wholesale portfolio. Hughes said: “As we have previously highlighted, while credit quality in our Caribbean portfolio has been stabilising, we believe that until we see a more sustained, economic recovery, the credit environment will likely continue to be challenging.” Responding to a question from John Aiken of Barclays Capital Research Division, RBC president David I McKay said RBC expects little impact of the Jamaica sale on the provision for credit losses (PCL) the bank currently allocates to the Caribbean. He said RBC Jamaica was “a small business for us with a very small lending book. So we were predominantly deposit-centric in Jamaica. So I don’t think it would be a material change to our overall PCL profile of the Caribbean.”
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff.
Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments.
Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.