Home' Trinidad and Tobago Guardian : June 21st 2015 Contents For the six months to April
2015, SBTT delivered rev-
enues of $702.2 million and
an after-tax profit of $259.6
million. Total revenues
expanded by 7.9 per cent,
moving from the previous
year s tally of $651.1 million. The net interest
income component rose by 4.9 per cent,
advancing to $460 million from $438.8 million.
The other income element grew by 14 per
cent to $242.2 million from the last period s
This higher growth rate in non-interest
income is becoming more prevalent at many
financial institutions, as they develop their
fee, commission and other investment struc-
tures. In SBTT s case, insurance services is
proving to be an increasingly reliable stream
of income and profit.
Non-interest expense rose by 5.7 per cent,
moving from $310.7 million to $328.5 million.
Reflecting its adjustment to a higher level
of economic uncertainty, the bank increased
its loan loss expense provision to $25.2 million
in the current period; this shows a more than
100 per cent increase from the $11 million
allocated in the 2014 period.
These changes saw SBTT deliver a pre-tax
result of $348.5 million, which reflects a 5.8
per cent improvement over the comparative
2014 figure of $329.5 million.
The effective tax take increased from 24.2
per cent in 2014 to 25.5 per cent in the current
period. This change limited the growth in
after-tax profit to 3.9 per cent, as it improved
to $259.6 million from $249.7 million.
Changes in financial position
Total assets rose from $20.7 billion as at its
October 2014 year-end to $21.4 billion last
April, reflecting an increase of 3.6 per cent.
The two most significant advances were
recorded under net loans to customers and
investment securities. The former rose to $12.7
billion from $11.8 billion, reflecting a 7.7 per
In the case of the latter, this component
expanded robustly by 42 per cent to $2.2 billion
from the October 2014 level of $1.57 billion.
During the second quarter SBTT settled its
outstanding bond, thus removing $618 million
from its liabilities. Also, as its insurance busi-
ness continues to grow, policyholders funds
rose from $797.5 million to $992.3 million,
reflecting a 24.4 per cent gain. Amounts due
to banks and related companies rose to $83.8
million from $40 million.
These were the major changes that resulted
in total liabilities increasing by only 4 per cent
to $17.84 billion from $17.15 billion.
Stockholders equity ended at $3.58 billion
from the 2014 year-end figure of $3.53 bil-
The retained earnings balance increased by
only $11 million to end at $2.66 billion. This
relatively small figure was due to an allocation
of $55 million being made to the statutory
reserve while dividends to shareholders con-
sumed $194 million.
Lower values on available-for-sale invest-
ment pulled down the investment valuation
reserves to $17.2 million from $29.6 million
previously. With 176,343,750 shares outstand-
ing, each share has a book value of $20.29
Helped by higher lending disbursements,
particularly in the second quarter, the retail,
corporate and commercial banking segment
delivered higher revenues and greater pre-tax
profit. New variations of its insurance products
allowed this division to maintain its strong
advances over the half-year.
The only puzzling result was the huge con-
traction in both revenues and profit that
occurred under the trust and merchant banking
Dividends, share price and future
The interim dividend for the half-year
remained unchanged at $0.80, of which $0.40
will be paid on July 10, 2015.
At its October 31, 2014 year-end, SBTT s
share price was $57.98. Since then, it has
moved mostly in an upward trajectory, closing
at a high of $63.00 on May 15, 2015. Last
Wednesday, it traded at $62.15.
As local interest rates start to increase, net
interest income should again show stronger
For its half-year to April 2015, FCI posted
revenues of US$257 million and generated an
after- tax profit of US$52.1 million.
Total revenues fell by 2.9 per cent, moving
from the previous year s US$264.4 million
down to US$256.7 million. The net interest
income component contracted to US$176.2
million from US$185.6 million, or by 5.08 per
cent. In contrast, the other income element
expanded by 2.1 per cent to US$80.5 million
from US$78.8 million.
Operating expenses fell by 1.15 per cent,
declining by almost US$2 million to US$172.3
million. Although loan balances were lower,
their quality has improved. Consequently, loan
impairment expense contracted to US$27.4
million from the previous period s US$169.5
million. Included in the 2014 period was a spe-
cial allocation to loan losses of US$115 million.
In the 2014 period, there was a special allo-
cation to goodwill of US$116 million; no such
expense was incurred in 2015.
These changes allowed FCI to report a pre-
tax profit of US$57 million; this compares very
favourably with the loss of US$195.3 million
reported for the 2014 half-year.
After allowing for taxes and non-controlling
interests, the profit attributable to shareholders
amounted to US$50.6 million. This result
reflects EPS of US$0.032 (2014: loss of
Changes in financial position
Total assets rose from US$10.78 billion as
at its October 2014 year-end to US$11.16 billion
last April, reflecting an increase of 3.6 per cent.
Loans and advances to customers declined
to US$5.97 billion from US$6.14 billion. Con-
versely, the total of all its cash balances climbed
by 28.7 per cent; this reflected the movement
from US$1.81 billion to US$2.33 billion. All its
operating, investing and financing activities
generated positive cash flows.
The value of investment securities rose mar-
ginally to US$2.32 billion from US$2.31 bil-
Total liabilities advanced to US$9.81 billion
from US$9.44 billion.
Customer deposits and other borrowed
funds rose from US$9.2 billion to US$9.46
billion. In addition, debt securities in issue
climbed to US$134.5 million from US$31 mil-
Stockholders equity closed on April 30,
2015 at US$1.36 billion from the 2014 year-
end figure of US$1.33 billion.
The retained earnings balance was boosted
by the period profit of US$50.63 million and
reduced by the final dividend with respect to
the 2014 fiscal year of US$23.35 million.
With 1,577,094,570 shares outstanding, each
share has a book value of US$0.85 (TT$5.37)
(October 2014: US$0.83).
Even with three per cent lower revenues,
and although still showing a loss, the retail
banking segment exhibited the biggest swing
in its results. Here, in 2014, most of the loan
loss provision was allocated.
Despite a small revenue decline in the whole-
sale banking sector, profits recovered massively,
comfortably eclipsing the loss for the 2014
period. With only a small improvement in
revenues in the wealth management segment,
profits surged by a robust 44 per cent.
Dividends and share price
The interim dividend for the half-year
remained unchanged at US$0.015 (TT$0.095);
this sum will be paid on June 26, 2015.
At its October 31, 2014 year-end, FCI s share
price was TT$5.50. Since then, it has generally
moved in a narrow range. Its price slipped to
a low of TT$4.75 on December 31, 2014. By
mid- March 2015, it recovered somewhat,
trading at TT$5.10, from which point it again
Last Wednesday, it closed at TT$5.00.
With the recently announced resignation
of its CEO, Rick Parkhill, the bank has entered
a transitional phase during which time he will
help groom the newly designated CEO, Gary
Brown, to assume full operational responsi-
bilities, effective January 1, 2016.
This new appointment coincides with the
bank entering a new phase, where, having
shed much of its legacy and related burdens,
it can fully concentrate on making a more
robust contribution to the parent company s
results and to its regional and local sharehold-
JUNE 21 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
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