First Citizens Bank Ltd (FCB) recorded a profitable first quarter for the three months ended 31 December 2018. FCB recorded a profit before tax of $311.5 million, a growth of 22.7 million or 7.9 per cent when compared to the corresponding period in 2017. The company’s profit after tax was posted as $214.5 million, which accounts for a 5.5 per cent increase, as compared to December 2017.
In an interview with FCB Group CEO, Karen Darbasie, she placed the numbers documented in the first quarterly report into context. Darbasie explained that the reasons for the growth of the company were largely due to a well executed marketing campaign. She said: We do a big Christmas campaign that starts in the middle of September and finished off at the end of December.”
Darbasie said: “So we saw very substantial growth in the loan book in the first quarter, loan-book growth was 1.7 billion. That was very positive for us because when the balance sheet grows in the first quarter, then the income falls in line after that because the interest income falls in line the next three quarters. So that was very positive and is a good sign for us.”
The growth in customer loans resulted in net interest income of $14.3 million or 3.7 per cent. FCB’s earnings per share increased by 4 cents to 85 cents for the first quarter period and the board has declared an interim dividend of 38 per ordinary share. Darbasie noted that “our earnings per share and our dividends per share are slightly behind the profit before tax growth because the tax rate has been going up year-on-year.”
“In addition, we are a financial services group, so when you look at the subsidiaries in the group, the bank itself has an effective tax rate that’s at the highest level but the subsidiaries are actually not banks in and of themselves.”
Darbasie said: “So the more the bank contributes to the bottom line compared to the investment services or asset management, the higher the tax rate of the group and the bank has been performing particularly well over the last couple of years”.