Jun 2007 Financial News

FCIB Releases Half Year Results

Jun 01, 2007

Results for the Half Year Ended April 30, 2007
All figures quoted in United States Dollars unless otherwise stated

First Caribbean International Bank Limited (FCIB) had another strong quarter for fiscal 2007. The Group reported Earnings Per Share (EPS) of 3.9 cents for Q207 which brought the HY EPS to 7.9 cents. HY07 on HY06, this was a significant increase of 43.64 per cent or 2.4 cents, while Q207 on Q206 the EPS rose an outstanding 77.27 per cent or 1.7 cents. According to the Chairman’s Report, these results were impacted by the following transactions which had a net positive impact of $14 million:

1. The Group changed its health benefit scheme which resulted in the recognition of a curtailment gain of $17.1 million
2. The Group changed its estimate on the useful life of software which resulted in an increase in the depreciation charge for the year to date in the amount of $3.2 million.

Excluding the effect of these transactions, the growth in earnings year-on-year is 26.8 per cent.

For the HY ended April 30, 2007, Net Interest Income amounted to $202.423 million, an increase of 13.71 per cent or $24.407 million on the comparative period for 2006. Interest Income rose 28.57 per cent or $84.104 million to $378.436 million while Interest Expense increased 51.32 per cent or $59.697 million to end the period at $176.013 million. The growth in Net Interest Income was driven principally by increases in loan volumes as well as the acquisition of the Curacao operations, of which only 3 months of operations were included in the corresponding period of 2006.

Operating Income was up by a considerable 21.22 per cent or $13.643 million to $77.940 million while Operating Expenses fell a minimal 2.04 per cent or $2.867 million to end the HY at $137.536 million. Excluding the impact of the transactions previously mentioned, Operating Expenses would have increased 8 per cent or $11.100 million due to an additional quarter’s expenses from the Curacao operations. Loan Loss Expenses rose 25.04 per cent or $1.227 million to $6.127 million. Amortization of Intangible Assets amounted to $1.480 million for HY07.

HY07 on HY06, Income Before Tax and Minority Interest increased 39.39 per cent or $38.210 million to $135.220 million. The Effective Tax Rate for the period under review was 8.41 per cent compared to a rate of 10.52 per cent for the comparable period in 2006. As a result, Net Income Attributable to Equity Holders of the Company increased from $84 million (HY06) to $120.505 million (HY07), up a substantial 43.46 per cent or $36.505 million.

The Board of Directors has approved an interim dividend of 3.0 cents per share payable on July 20, 2007, to all shareholders on record on June 1, 2007.

FCIB is currently trading at a price of TT$11.00 on the local market. Based on these commendable results we are revising our forecasted EPS upwards from TT$0.85 to TT$0.95. At the current price and this revised EPS, this share is trading at a price to earnings multiple of 11.58 times. Given that FCIB usually trades between 15 to 18 times we continue to recommend a BUY on this share.

Nancy Chen
WISE Equity Research Team