FCIBJ weathers big impairment loss, sees profit growth
FIRSTCARIBBEAN International Bank Jamaica (FCIBJ) took a $264 million impairment on loan losses during the final quarter of its financial year which ended October 31, 2009.
The impairment for the quarter was more than the $185 million in loan loss impairment it racked up during the previous nine months while the total impairment for 2009 was 243 per cent more than the previous year.
The bank, however, ended the year with a higher net profit than the previous year, reflecting what the bank’s chairman, Michael Mansoor, called “the impact of prevailing economic conditions”.
FCIBJ’s net income increased by 6.1 per cent from $835 million during the year that ended October 31, 2008 to $887 million during the period under review.
Net interest income increased by $215 million year on year — from $3.1 billion to $3.3 billion — “largely driven by growth in average loan balances during the course of the year”, according to Mansoor.
FCIBJ’s balance sheet, however, showed a decline in loans and advances to customers over the year, dropping from $34.9 billion to $34.4 billion.
Asset growth was primarily pushed up by interbank lending and investment in securities. At the end of October 2009, FCIBJ had $5.2 billion owed from other banks up from $2 billion as at October 31, 2008, while the value of investment securities rose from $1.1 billion to $2.3 billion.
Non-interest income nearly doubled, moving from $594 million the year before to $1.1 billion during the review period. Gains totalling $135 million were realised in non-interest income on the sale of investment securities. Fee income increased by $91 million or 17.7 per cent resulting from increased underwriting and syndication activities, while prior year results include a $160-million loss as FCIBJ was unable to claim hedge accounting for certain interest rate hedges.
“The Group has since reinstated these hedges from an accounting perspective and this year’s results include a gain of $104 million,” said FCIBJ.
Non-interest expenses went up from $2.3 billion to $2.6 billion.
FCIBJ’s capital base grew from $6.4 billion to $7.3 billion over the year.
