Aug 2010 Financial News

FCIB's net profit falls 21% in Jul Q

Aug 27, 2010

FIRST Caribbean International Bank's (FCIB's) net profit plunged by 21 per cent during the three months to July 30, 2010, when compared to the corresponding period in 2009.

The bank, which has over 100 branches, banking centres and offices in 17 regional markets across the Caribbean and the world, saw net profit decline from US$ 38.2 million ($3.3 billion) to US$30.2 million ($2.6 billion over the corresponding quarters.

FICB's profit fell largely owing to a general downturn in economic acitivity, according to the firm's chairman, Michael Mansoor.

"The economic environment remains challenging with a slowdown in business activity and overall loan demand, low interest rates and persistent unemployment levels across many of the countries in the region," said Mansoor in a statement to shareholders.

The bank's net interest income decreased 11.3 per cent, or by US$11.8 million to come in at US$93.2 million for the review quarter due to lower loan and securities volumes and rates.

However, an increase in loan loss expense of 47 per cent also placed pressure on the income of the group and this significant increase was enough to negate the gains on operating income, which were 14.7 per cent or US$5.97 million for the period under review.

"While every effort is being made to work with our customers to manage their debt obligations in these trying times, loan loss expenses have increased as the credit portfolio is impacted by the environment and these conditions are expected to continue," said Mansoor.

There was a decline in operating expense of three per cent, or US$2.5 million, which helped to bolster operating income. Mansoor noted that this was as a result of management's actions to counter the effects of the downturn.

"In addition, the bank benefited from lower taxation expenses due to lower income earned in the higher tax jurisdictions," he said.

Despite the performance results, Mansoor noted that the bank remains strong and "well poised to take advantage of future opportunities".

FCIB is the largest regionally-listed bank in the English-speaking Caribbean, with assets of over US$10.9 billion and market capitalisation of US$2.5 billion and is a subsidiary of Canada's Canadian Imperial Bank of Commerce (CIBC).

As part of the corporate social responsibility framework, the bank dedicates one per cent of its prior year's pre-tax profits to community partnership causes each year. On Wednesday, the bank donated office furniture to the 100-Man Police Station in Greater Portmore. Manager of FCIB Portmore branch Diana Warren-Robinson presented the office desks and chairs to the station in the hope that they would facilitate the administrative functions carried out by the police personnel. Similarly, in 2009 and 2010 the Ascot High School received financial support from the Bank for its Student Behaviour Modification Programme.


Source:
Jamaica Observer
Friday August 27, 2010

http://www.jamaicaobserver.com/business/FCIB-s-net-profit-falls-21--in-Jul-Q_7907599