Sep 2014 Financial News

RBL - Press Release - Clarification on article published on September 18, 2014

Sep 23, 2014

The Trinidad Guardian's Business Edition in its September 18 publication contained two contiguous articles “Will MHTL Award Force sales of RBL Majority Stake?” and “Republic Executives sell shares worth $37.55M”. The articles sought to link two entirely independent activities in a sensational manner. The Bank is unable to comment on the contents of the first article but, in view of the negative implications for the image and reputation of the Bank arising out of the second article, the following is submitted for the information of all of our valued stakeholders.

1. In December 2000, the shareholders of the Bank agreed to the introduction of a Stock Option Plan comprising a maximum of 7,950,650 shares. Between 2000 and 2014, forty-nine (49) members of senior management team have participated in the plan. Twenty-six (26) members of the Bank’s senior management are currently eligible for stock options.

2. Stock options are granted at strike prices, based on share prices during the relevant fiscal period. Individuals are required to purchase the shares at the strike price.

3. Stock options are granted based on the performance of the individual against agreed targets.

4. Since the introduction of the plan, thirteen years ago, senior management including retired managers would have purchased 2,598,818 shares through the stock options plan.

5. After the stock options are granted, there is a minimum three-year holding period before they can be exercised and a maximum ten-year period during which it can be exercised.

6. There are prescribed blackout periods during which individuals cannot deal in either the Bank's shares or options. They are, one month before the release of quarterly financial results, two months before the release of year end results and any time senior managers are in possession of non-public information that could impact the share price. This means that the window of opportunity during which one can deal is very small.

7. The decision to exercise options, subject to various restrictions (including those mentioned above), is based on each individual's personal circumstances, the strike price and the demand for Republic Bank shares at the particular time.

8. Between 2003 and 2014, stock options have been consistently exercised and, in accordance with the regulatory requirements all trades executed by Senior Officers as defined by the Financial Institution Act 2008, are reported to the relevant authorities.

Senior Management stands firmly behind Republic Bank and it is categorically denied that the decision by individuals to exercise their stock options is a reflection of a lack of confidence in Republic Bank, neither is it as a consequence of the developments identified in the Business Guardian article.

Over the last three years, as one of the most profitable Banks in the Region with the least volatile earnings, Republic Bank's dividend yield has ranged from 4.3% (2011) to 3.9 % (2013). Over the last 10 years, the Bank's share price has risen by 53% from $79.71 per share in September 2004 to $121 per share in September 2014. The Bank's total market capitalisation is $19.7 billion (using share price of $121.73 as at September 19, 2014).

Republic Bank is a solidly performing institution providing superior returns to Shareholders. Republic Bank views the article as highly irresponsible and regrets the unfortunate innuendos contained in the article(s), which can undermine the confidence of our stakeholders, including staff, customers and shareholders, as well as, injure our reputation, regionally and internationally.

Republic Bank exhorts all journalists to be mindful of the possibly unintended consequences of their writing on the reputation of individuals and organisations of public importance.

Source:
The Trinidad and Tobago Stock Exchange Limited
Tuesday September 23, 2014