CIBC Caribbean Bank Limited is growing at a faster pace through several technological solutions and sustainable funding projects in its remaining 10 markets.

CIBC Caribbean Bank (formerly FirstCaribbean International Bank Limited) has trimmed itself from 17 to 10 markets in the last five years which has allowed for it to focus on specific markets where the highest growth potential exists. As a result of this realignment, CIBC Caribbean was able to grow its total revenue to US$192.26 million in the third quarter (May to July) which was not only above the comparative period in 2023, but far exceedsthe US$154.67 million it earned in 2019 when it was in more markets.

“To put it in perspective, we have 10 countries now. We have a larger balance sheet in terms of assets, in terms of loans and we have the most customers ever. We have over half a million customers now. So, whilst we have divested out of six countries, we have replaced that in the countries that we have stayed in along with growing. Whilst we have a smaller geographic footprint, we’re now a bigger bank,” said CIBC Caribbean Chief Executive Officer (CEO) Mark St Hill in a recent interview with the Jamaica Observer.

To support this growth, CIBC Caribbean injected $759.82 million in the March 2024 quarter and a $3.86-billion injection in the June quarter into FirstCaribbean International Bank (Jamaica) Limited. This was to assist the Jamaican business in strengthening its ability to grow where it is currently the sixth-largest commercial bank by assets.

CIBC Caribbean has also been actively growing its loan book which was up two per cent over the nine months to US$6.80 billion with the Jamaican business up 16 per cent from $88.94 billion in October 2023 to $103.25 billion in June 2024.

This loan demand is likely to improve in the upcoming year as global central banks begin cutting their policy rates which is likely to further spur more demand for loans by customers. However, one of the implications for this reduction in interest rates is reduced interest income from different financial instruments derived in United States dollars (USD) such as bonds and other money market instruments. About half of CIBC Caribbean’s revenue is in USD and its clients with USD loans and overdraft facilities benefitted on September 23 from the 50-basis point (0.50 per cent) cut in the United States Federal Funds rate by the Federal Reserve, the US central bank, on September 18.

“It is a real issue for us to navigate. It will impact our earnings in the short term. So, there will be a few more interest rate cuts, we suspect. Because we have a significant exposure in US dollar loans, our total revenues will drop. However, on the flip side, what we’re seeing is the demand should increase. So, those investors that were parking growth opportunities whether in the hospitality sector, energy sector, wherever, the interest rates they were holding off, it may now be the time for them. So, what I’m hoping that we can replace with accelerated loan growth and pick up some of the slack,” St Hill added.

Despite this adjustment, the CIBC Caribbean CEO is optimistic about the opportunities to be unlocked as its customer base see the Caribbean entity more aligned with its parent company Canadian Imperial Bank of Commerce (CIBC)’s brand. The name change to CIBC Caribbean officially took effect on July 11 after the shareholders approved it on March 15.

CIBC Caribbean has arranged more than US$500 million in sustainable financing for green activities across the region this year. This is in addition to singing a memorandum of understanding with IDB Invest, an arm of the Inter-American Development Bank (IDB), in June to foster growth of small and medium enterprises (SMEs) along with other sustainable development goals.

This comes on the heels of the bank having a half a million-customer base with 20,000 customers driving the growth of the loan portfolio and another 400,000 customers falling under the personal and business banking segment. St Hill sees this as an opportunity to unleash a payment strategy, expand its wealth management capabilities and grow its business banking segment.

“On the business banking side, we have a significant business banking portfolio, but a lot of it is transactional bank accounts. They use our technologies, but we feel that if we mine this data properly, provide some client relationships and have a lifecycle approach to growing these companies, we think we can extract more value,” the CEO explained on the focus to grow its business banking segment.

CIBC Caribbean has been adding new technological features this year which includes the ability to see the available foreign exchange (FX) customers in the Bahamas and Barbados can spend on their debit and credit cards, launched the ‘Ways to Bank’ digital hub and launch of their digital onboarding facility across the region. This is in addition to its already existing loan store and cheque-scanning ability offered to clients in different markets.

CIBC Caribbean will also be looking to be more attractive to clients in the payments segment which covers cash management, card issuing and card acquiring.

“We have had wealth management, but we have not really leveraged [it] fully and now that we are very much closely aligned with our parent CIBC brand, we think that we can do much better in wealth management. So, we have just hired a new head of wealth management. He’s based in Cayman, and he is delivering a full integrated strategy which will be delivered to our board at the end of the year,” the executive explained.

CIBC Caribbean’s nine months revenue was up one per cent to US$560.35 million with consolidated net profit coming in at US$217.73 million. The core of these earnings comes from its corporate banking segment which earned US$140.87 million in external revenue and US$179.08 million in consolidated net profit. The personal and business banking segment grew net profit by 46 per cent to US$26.26 million with wealth management seeing a 27 per cent compression in consolidated net profit to US$7.38 million.

One of the reasons attributed for the slight uptick in expenses was related to increased operational costs, but also the divesture of its Sint Maarten and Curaçao operations to Orco Bank N V CIBC completed the sale of its Curaçao business on May 24 and is finalising its exit in Sint Maarten.

Achilles M Perry, a majority shareholder director, will be leaving CIBC Caribbean’s board on November 1 while Michael Capatides will be appointed on the same date. Perry is the general counsel for CIBC’s International Capital Markets while Capatides is a recently retired CIBC Bank USA executive. Independent director Alasdair Robertson will be stepping down from the board of CIBC Caribbean effective October 31. His successor will be announced in due course.

CIBC Caribbean has also appointed Doug Williamson as its Managing Director, Transformation, Governance and Control effective November 1, subject to regulatory approval.

CIBC’s total assets are up three per cent year-to-date to US$12.71 billion with cash balances of US$2.35 billion. US$161.99 million was being carried as held for sale in relation to CIBC Caribbean’s banking operations in Sint Maarten. This figure was US$260.58 million up to April 30 before the sale of the Curaçao operations which was finalized on May 24 to Orco.

Total liabilities grew to US$11.35 billion with deposits topping US$11.103 billion and equity attributable to shareholders at US$1.48 billion.

CIBC Caribbean’s stock price closed at TT$6.81 on Thursday which leaves it down three per cent year to date with a market capitalisation of TT$10.74 billion. FCI also declared a US$0.0125 dividend totalling US$19.71 million to be paid on October 18 to shareholders on record as of September 26.