FirstCaribbean hit by 316 per cent decrease in net income

0
FirstCaribbean hit by 316 per cent decrease in net income

(TRINIDAD GUARDIAN) — FirstCaribbean International Bank (FCIB) has recorded a net loss of US $110 million or $743 million for the quarter ended April 30.

This slide represents a 316 per cent decrease in net income, as it recorded a US $51 million or $344 million profit for the comparable period ended April 30, 2019.

Chief executive officer Colette Delaney in the bank’s financial report said: “The quarter’s financial results were negatively affected by items of note including US $100 million of provision for credit losses, a non-cash goodwill impairment charge of US $51 million and income tax credits of US $7.6 million.”

Delaney said that the incremental provision for credit losses and the reduction in the carrying value of goodwill reflects the bank’s revised forward-looking views for probability of defaults, loss given defaults and macro-economic forecasts driven by the extent and timing of anticipated impact from COVID-19.

Excluding these items of note, Delaney highlighted that the Bank generated a net income of US $33 million or $209 million. She also noted that the bank’s performance was adversely affected by lower revenues due to significant declines in US interest rates and reduced transaction-related non-interest income.

According to Delaney, since the bank reported its first-quarter results in March 2020, the COVID-19 pandemic has dramatically changed the outlook for the global economy and for the economies in the territories where FCIB operates.

She also underscored that in its World Economic Outlook, the International Monetary Fund (IMF) projected that global real gross domestic product (GDP) would contract by three per cent in 2020.

“Regionally, we have already seen that the Caribbean’s high dependence on travel and tourism, combined with lockdowns and social distancing to contain the spread of the illness, has reduced real GDP,” said Delaney.

In the majority of the markets in which FCIB serves, the IMF has predicted declines in 2020, ranging from 4.5 per cent to 13.7 per cent.

Despite the near term economic forecast, FCIB declared a second quarter dividend of US $0.0125 or $0.084 per share to be paid on July 3, 2020 to shareholders of record on June 11, 2020.

Delaney posited that the bank’s Tier 1 and Total Capital ratios remain strong at 12.8 per cent and 14.5 per cent in excess of the applicable regulatory requirements.

With the contraction in economic activity, cash flow is critical to keeping businesses and households afloat, this is why Delany announced that support would be given to the bank’s our clients, where they will be offered a six-month moratoria on loans on request and three-month automatic moratoria on credit card payments.

She said that the bank has also seen increased usage of its digital offerings—online and mobile banking. The bank has donated US$250,000 or $1.7 million through its charitable organisation— FirstCaribbean International Comtrust Foundation to support for personal protective equipment, testing kits and other supplies for healthcare practitioners on the front line.

The bank CEO note that COVID-19 is unprecedented. She said the institution has made available accommodations for many to work from home.

She said: “As an essential service, we have erected plexiglass screens in branches, installed hand sanitiser dispensers in all our facilities and have issued employees with masks.”

Delaney also said that the bank’s employees have embraced and adapted to new protocols such as shift systems and regular environmental cleaning to ensure the safety of both their colleagues and clients.

(0)(0)

No posts to display

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.