MANAGEMENT OF CIBC FirstCaribbean International Bank is feeling cheerful this holiday season as the bank reports a $286.6 million profit for the financial year ended October 31.
FirstCaribbean chief executive officer Gary Brown said the net income was $90.8 million (46 per cent) more than last year and he called it “a significant improvement in performance”.
The company has released its consolidated financial statements for its last financial year.
“Lower loan loss impairment expense contributed significantly to this result, as the bank benefited from increased loan recoveries and an improved loss experience. Growth in our core revenue was also a highlight for the year,” the CEO said.
“Despite the slow pace of economic recovery and uneven investment activity across the Caribbean, productive loans grew five per cent over last year, while non-performing loans declined by 28 per cent, together reflecting the bank’s priority to grow its business with a sound risk management focus.”
Brown added that “both retail and wholesale banking segments produced strong productive loan growth of four per cent and six per cent, respectively, as origination activity outpaced the prior year”.
FirstCaribbean’s revenue in the 2016 financial year was more than $1 billion, increasing by $22.8 million (two per cent) when compared to 2015’s revenue.
The bank also reduced its operating expenses by $25.4 million (three per cent).
Brown explained that “prior year’s expenses were hurt by restructuring related costs which included the sale of the Belize operation”.
“The bank is committed to discretionary expense control and strives to maintain a balance between the investment in its network, products and people. However, the impact of higher business taxes imposed by various jurisdictions coupled with higher operating costs continues to hurt operating results,” he said.
“Loan loss impairment expense was significantly lower by [$48.4 million] compared with the prior period’s expense of [$83 million]. Additionally, non-productive loan balances reduced by [$323.2 million] to [$836.8 million] compared with the same period last year. Significant effort has been placed on strengthening credit quality within our total loan portfolio.”
Brown said the 2016 results “build on the recovery from last year”.
“While the economic outlook for the Caribbean remains modest, we are positive about the bank’s future and believe we are well positioned for sustainable growth and improved shareholder returns,” he said.
FirstCaribbean “completed a number of strategic initiatives in 2016 to support acceleration of profitable growth.”
“To deepen client relationships, customer relationship management systems were enhanced and credit approval processes streamlined to deliver an improved client experience. Customer feedback on the enhancements has been extremely encouraging,” Brown said. (SC)
