FirstCaribbean International Bank has lost value and is now a US$10.9 billion company measured by assets, a near billion-dollar depletion of its balance sheet compared to a year ago.

Though still unaudited, the October 31, 2008, balance sheet reflects a write-down on the fair value of financial assets, a reduced portfolio of investment securities, reduced cash - amounting to about US$1.6 billion.

This was partially offset by a US$734 million or 12 per cent gain in the banking group's loan portfolio to US$6.8 billion.

Fattened results

Meanwhile, the Jamaican subsidiary has outperformed its parent, returning higher profits of J$835 million off revenue of US$4.98 billion, compared with $771 million profit and J$4.35 billion revenue at October 2007. The latter year's result was fattened by $82 million of surplus that resulted from changes in the policy linked to the bank's retirement scheme.

Earnings for Jamaica this year were constrained by an $86 loss for gains not recognised " because of limits placed on the economic value of the surplus" in the pension plan, as well as $160 million impairment relating to the "ineffectiveness" of certain hedges made by the bank.

The two items totalled losses of $166 million after taxes.

Billion-dollar growth

FCIB Jamaica's assets also rose by $8 billion to $49 billion, some $3.5 billion of which represented an improvement in the loan portfolio, which grew to $34.9 billion. Capital rose to $6.45 billion from $5.6 billion a year ago.

The Jamaican bank, which is in the process of recruiting a new managing director, has not declared a dividend in line with previous years.

Current boss Milton Brady has been promoted to regional boss of corporate banking.

However, parent FCIB will pay dividends of three cents per share amounting to US$45.74 million on its current results - bringing total dividend year to date to six cents in line with the 2007 payouts - notwithstanding a decline in net income attributable to stockholders, from US$256 million to US$175 million.

The majority of the funds will be remitted to parent CIBC of Canada, which owns more than 90 per cent of the regional bank.

At takeover of the bank in 2006, FirstCaribbean was valued at US$12.4 billion by assets.

Last year, its value fell to US$11.9 million, but subsequent events linked to the ongoing financial crisis globally has put additional squeeze on the banking group's assets and profits.

Stockholder equity also declined from US$1.36 billion to under US$1.34 billion.

Chairman Michael Mansoor has said, however, that the 2008 results were in line with expectations.

Bank of the year

The bank also reported separately that two of its operating companies, Barbados and The Bahamas, have been named Bank of the Year 2008 by The Banker.

The award is the third straight win for The Bahamas, and was "singled out by the Banker for its maintenance of strong and prudent balance sheet management within the current turbulent global financial context," said FCIB.

The win for Barbados follows the bank's investment in an automated end-to-end international payments system, and fully electronic self-service bill payments platform to enhance customer service delivery.

business@gleanerjm.com