FirstCaribbean International Bank Limited’s (FCIB) sale of its St Kitts operation has fallen through as the Eastern Caribbean Central Bank (ECCB) decided not to grant final approval for the transaction.

FCIB had announced in October 2021 that it was seeking to sell its banking assets in four Organisation of Eastern Caribbean States (OECS) countries following the failed sale of a 66.73 per cent stake to the GNB Financial Group by its parent company Canadian Imperial Bank of Commerce (CIBC) in February 2021. CIBC decided to sell assets at the time for US$797 million.

Since then, FCIB has ceased its Dominican operations, lost its attempt to exit St Kitts and is still waiting on the St Vincent and Grenada deals to conclude, though FCIB Barbados had gained conditional approval on July 15 from the ECCB for the sale of its St Kitts and St Vincent operations.

However, in a notice published on April 6, FCIB explained that St Kitts-Nevis-Anguilla National Bank Ltd did not secure final approval from the ECCB to complete the acquisition. The ECCB also informed FCIB (Barbados) that it didn’t grant final approval for the sale of its operations in St Kitts.

Only the Aruba sale by FCIB Cayman in February 2022 has gone through with the disposal of its Aruban operations bringing in US$6.8 million.

“We are an agile organisation, and it is our duty on behalf of our employees and clients to ensure that we deliver a steady ship that provides omni-channel access to banking services in St Kitts. We are prepared to pivot and look towards growing our business in St Kitts into the future,” said FCIB Chief Executive Officer Mark St Hill in a press release.

The disclosure also mentioned that the ECCB will remain fully engaged with FCIB Barbados in assessing its regional footprint in the Eastern Caribbean Currency Union. There are four locally owned/locally incorporated banks in St Kitts and Nevis with FCIB Barbados’s operation being the sole foreign-owned branch.

As a result of the ECCB’s decision, FCIB intends to transform the way it does business in Basseterre, St Kitts, with the installation of smart ABMs and other self-serve products. This will be complemented by access to both in person and digital banking services in the Eastern Caribbean country.

“Our priority is to signal to the market that we are staying and open for business. We have been conservative in the St Kitts market over the past year and a half as we prepared the business for sale. However, we will now concentrate our effort on building the business, reconnecting with both our retail and corporate clients in a big way and providing them with the best products and services CIBC FirstCaribbean has to offer,” said Donna Wellington, managing director for Barbados and the OECS countries.

The inability for FCIB to reduce its exposure in the Caribbean reflects the hurdles Canadian banks face to downsize their operations in the region. The Bank of Nova Scotia (BNS) was able to sell 11 of its operations in the Eastern Caribbean and Belize to Republic Financial Holdings Limited, Eastern Caribbean Amalgamated Bank and Caribbean Investment Holdings Limited between 2019 to 2021. The only transaction which didn’t go through was the sale of its Guyanese operations to Trinidad and Tobago-based First Citizens Bank Limited in June 2022.

BNS has since sold Scotia Insurance Eastern Caribbean Limited and Scotia Insurance Caribbean Limited to GraceKennedy Limited while it continues to build its presence in Latin American markets and consolidate some operations in countries such as the Dominican Republic.

Royal Bank of Canada was able to exit the Eastern Caribbean after it sold to a consortium of banks in April 2021. Only CIBC has had difficulties in trying to reduce its Caribbean exposure. FCIB had attempted a US$240-million initial public offering in April 2018 before CIBC called it off.

FCIB’s first quarter (November to January) saw its total revenue increase by 28 per cent to US$182.23 million with its net profit from continuing operations coming in 47 per cent higher at US$70.22 million. Its corporate and investment banking segment lead the charge with US$43.43 million in net profit from continuing operations while retail, business and international banking brought in US$3.57 million. Its wealth management arm earned US$1.13 million.

The net loss from is discontinued operations was US$1.90 million while the net loss from its discontinuing operations was US$232,000. Net profit attributable to shareholders stood at US$66.72 million with earnings per share at US$0.042.

FCIB’s total assets marginally increased to US$12.88 million with loans and advances to customers at US$6.65 billion and securities at US$3.04 billion. The assets for disposal classified as held for sale, representing the unsold OECS operations, was valued at US$368.59 million.

FCIB’s total liabilities and equity attributable to shareholders closed the quarter at US$11.66 billion and US$1.19 billion, respectively. FCIB’s tier 1 capital and total capital ratios stood at 15.5 per cent and 17.2 per cent respectively at the end of the first quarter.

FCIB approved a dividend of US$0.0125 to be paid today totalling US$19.71 million. FCIB’s share price on the Trinidad and Tobago Stock Exchange is up 33 per cent year to date at TT$7.25 which gives it a market capitalisation of TT$11.43 billion.