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Financial News

May 2009 Financial News

Capital & Credit records J$80-million profit in first quarter

May 15, 2009

The Capital & Credit Financial Group Limited (CCFG) has recorded a net profit of $80.78 million for its first quarter ended March 31, 2009.

This profit was achieved despite the negative impact of the global downturn on its business in the quarter under review, in particular the decline in value of the Jamaica Eurobonds and the increase in interest rates on deposits and other funding instruments in the local economy.

Although the first quarter '09 profit is below the achievement of J$141.49 million in the corresponding period in 2008, last year's comparative result for the first quarter included a one-time gain of J$42.79 million.

Stockholders' Equity, as at March 31, amounted to J$5 billion and represents an increase of 17 per cent, when compared to the same period in 2008.

Chairman & Group President, Ryland T Campbell, has signalled the group's intention to maintain profitability and notes that, "The group will continue to strengthen its capital base through capital growth, cost containment and earnings retention, even in the face of the global uncertainties and their impact on our regional and local economies."

He also notes that "The four per cent increase in non-interest expenses, which excludes the Loan Loss Provision, is evidence of the group's commitment to cost containment and productive efficiency and remain areas of critical focus for the group."

For the current period ending March 31, 2009, Capital & Credit increased its gross operating revenue marginally to J$1.56 billion, compared to the corresponding period in 2008, with loans contributing J$338.48 million or 35 per cent, to boost revenue.

Other revenue, also saw a slight increase over the first quarter last year, with Foreign Exchange Trading and Translation Gains, Dividend Income, Commission and Fee Income contributing largely to this improvement.

Commenting on the increase in Revenue, Deputy Group President, with responsibility for Banking and Investment & CEO of the Capital & Credit Merchant Bank Group, Curtis Martin, says "The group continues to benefit from strategies to increase Sustainable Income by placing greater emphasis on higher interest-bearing activities, as well as focus on growing both the Retail and Corporate Loan Portfolios."

This strategy has seen loans in the bank as at the end of the period under review, after provisions for loan losses, standing at J$7.53 billion, an increase of 8.8 per cent over the prior year's J$6.92 billion.

Martin further added that the bank is still focusing on resolving the major components of this Portfolio, largely backed by Real Estate Transactions, and is expected to make significant recoveries in the coming quarters of this year. "The application of tighter risk controls, Portfolio Repositioning and intensified Delinquency Management" he says, "are some of the elements of the quality control strategies being pursued".

For his part, deputy group president with responsibility for the International Business Division, Andrew Cocking, reports that "The Broker/Dealer Business although now only marginally profitable, is expected to see improved profitability based on the additional products and services due to come to the market during the second quarter, as well as income from pipeline investment bank projects currently being negotiated for clients in the alternative Energy and Hospitality Sectors."

As far as the Remittance Division of the group is concerned, Mr Cocking further states that, "a new alliance with a Caribbean partner is projected to strengthen the Reggae Money Express Brand and improve the Remittance Business going forward".

Looking toward the rest of the year, Chairman Campbell said that the Capital & Credit Financial Group will continue its current strategies to maintain stability and enhance performance through customer service delivery; prudent and selective deployment of resources; productivity improvements; and risk management as it steers towards its next phase of growth, which will include the fulfilment of a strong strategic alliance to deepen the Group's business footprints and strengthen its capacity to enhance shareholder value.


Source:
Jamaica Observer
Friday, May 15, 2009

http://www.jamaicaobserver.com/magazines/Business/html/20090514T220000-0500_151481_OBS_CAPITAL___CREDIT_RECORDS_J____MILLION_PROFIT_IN_FIRST_QUARTER.asp