Jan 2007 Financial News

RBTT (Barbados) records threefold profit

Jan 02, 2007

ONE OF BARBADOS' SMALLEST commercial banks, RBTT Bank, has almost tripled its profits in the last three years.

DAILY NATION investigations revealed that when the bank publishes its performance figures shortly, they will show that profit before tax for the year ending December 31, 2006, is in the region of $8.5 million, while its total assets stand at around $600 million.

This compares with profits of $3.6 million at December 31, 2004 and $6.7 million at the end of 2005; while assets stood at just under $400 million in 2004 and just under $500 million one year later.

President and chief executive officer, John Beale, while declining to disclose the figures, noted that the bank continued to do well and expected profits to rise by 25 per cent and total assets by more than 20 per cent.

Beale took over the management of the bank three months after RBTT of Trinidad and Tobago bought Caribbean Commercial Bank (CCB) from CLICO in June 2004.

"Should the bank achieve these results," Beale told the DAILY NATION, "it would truly be a worthwhile investment decision for the RBTT group to have bought CCB. By almost any standard, any company that more than doubles its profit before taxes in a three-year period has done a superb performance."

Asked to elaborate on the factors that would have led to such a significant growth in profits, given the size of the bank in comparison with other players in the market, Beale said RBTT had capitalised on its size to offer personalised service to customers.

"We are a lot more flexible in meeting the needs of our customers," he said, noting that by carefully structuring its consumer loans, many people found it more worthwhile to borrow money from the bank to purchase consumer goods than to use the hire purchase arrangement of stores for the same products.

"We are certainly more nimble than some others, and we are able to make flexible decisions that truly respond to customer needs. Service is key to us and that's why I can report that when the need arose, we were able to close a mortgage transaction, including the disbursement of funds, within three weeks of receiving the information."

He added this was done without compromising security requirements.

Meanwhile, Beale confirmed he had heard reports of a possible merger or takeover of RBTT by a Canadian bank. Group chairman Peter July, he added, was asked recently to explain to the Trinidad Stock Exchange the reason for a rapid rise in the stock price.

A few weeks ago RBTT shares were trading around TT$24 and its most recent trade on December 13 was TT$36.

Beale said he agreed with the statement by managing director of Republc Securities Ltd, Ian Narine, that "a more pertinent question could have been what prompted the stock price to fall to a level of TT$24 in the first place since, it is my view, that falling to a three-year low on no new information is actually more unusual than a stock rising from a discounted valuation to one which is much more reasonable".

Beale said he believed that based on current trends in the global financial market, there would be further consolidation in the local and regional banking sector. (PR/RM)


The Daily Nation
January 2, 2006.
http://www.nationnews.com/story/356348529685137.php