On Wednesday, the first part of this two part series was published, Here’s Part II.
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FirstCaribbean suffers US$199 m loss
BRIDGETOWN— FirstCaribbean International Bank Limited on Friday announced that it recorded a net loss of US$199 million for the six months ended April 30. CEO Rik Parkhill said the bank’s second quarter results were affected by “items of note”, including US$115 million of incremental loan losses and a non-cash goodwill impairment charge of US$116 million. “The incremental loan losses reflect our revised expectations on the extent and timing of an anticipated economic recovery in the Caribbean region,” he said.
“In light of persistently challenging economic conditions in many Caribbean countries and our current expectations for the conditions going forward, we have reduced the carrying value of the goodwill, primarily related to our operations in the Bahamas.” According to Parkhill, excluding those items and non-controlling interest, FirstCaribbean generated US$35 milion of net income for the period, consistent with the same period last year.
The bank’s operating profit was US$90 million for the six months ended April 30 compared with US$87 million for the corresponding period in the previous year. Parkhill explained: “The goodwill impairment charge is a non-cash item and does not affect ongoing operations or capital ratios. After giving effect to the items noted above, our Tier 1 and Total Capital ratios remain strong at 20.7 per cent and 21.7 per cent, well in excess of applicable regulatory requirements.
“In addition, subject to board approval, CIBC FirstCaribbean expects to maintain its dividend level, with an interim dividend of US$0.015 per share.” Parkhill said the bank continues to invest in optimising its branch networks with installation of new ABMs, including dual currency machines in some markets. “Investment also continues in the development of strong product offerings for our customers, as we continue to provide financial solutions to help them achieve what matters to them.
“Additionally, we have maintained the level of our community giving through our charitable foundation. This reinforces our continued confidence in the strength of our franchise and our commitment to the Caribbean region,” he said. The bank will announced its 2014 second quarter results on May 29.