Home' Trinidad and Tobago Guardian : June 28th 2015 Contents JUNE 28 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
First Citizens Bank
At the mid-point in its current
fiscal year, FCB reported a
marginal increase in net
interest income to $577.6
million from $576 million in
the comparative period in
2014. Most of this increase was generated in
the second quarter, when the overall increase
exceeded $7 million; in the first quarter to
December 2014, the bank reported a decline
of $5.5 million in this line item.
Other income advanced to $293.7 million
from $274.3 million, reflecting an improvement
of 7.1 per cent. In the absence of details, one
is unsure if this includes any "one-off" trans-
Total net income rose by a modest 2.5 per
cent to end at $871.3 million from the earlier
period s $850.3 million.
Net impairment expenses rose from $18.5
million in 2014 to $21.8 million in the current
half- year. No reason was offered for this
increase, although it is likely to be similar to
that advanced by Scotiabank T&T (economic
Expenses rose by 1.9 per cent to reach $448.2
million from the previous level of $439.8 mil-
These changes allowed FIRST to report an
operating profit of $401.3 million; this reflects
a 2.4 per cent improvement over the $391.9
million for the 2014 half-year.
The share of profits from associates and
joint ventures fell to $6.4 million from $8.2
million in the previous half-year.
This contribution saw pre-tax income reg-
ister at $407.7 million (2014: $400.1 million).
At the after-tax level, its profit was $325.6
million versus $320.8 million for the compar-
ative 2014 period; this reflects an increase of
1.5 per cent.
This result translated into EPS of $1.30
versus $1.28 for the 2014 half-year.
Changes in financial position
Total assets increased by 2.7 per cent, moving
from $34.9 billion last September to $35.8 bil-
lion as at March 2015.
Investment balances rose to $12.55 billion
from $11.71 billion, or by 7.2 per cent. Also
increasing was loans to customers, which
climbed by 15.8 per cent to $12.9 billion from
The major decline was noted with cash and
statutory deposits, which fell by 20.3 per cent
to $6.6 billion from last September s $8.3 bil-
lion. The increase in loan disbursements and
the payment of last year s final dividend were
major contributors to this contraction.
Total liabilities rose to $29.5 million from
$28.6 million or by 2.9 per cent.
The major component, customers deposits
and other funding instruments, rose by 3.8
per cent to $26.7 billion from the September
2014 figure of $25.7 billion. Last September,
other funding instruments comprised $4.8
billion while customers deposits were $20.9
Stockholders equity advanced marginally
to $6.36 billion from the previous level of
$6.24 billion. Both negative comprehensive
income ($50.9 million) and dividend payments
($156.3 million) restrained the increase.
With 251,353,562 shares outstanding, each
share has a book value of $25.30 (September
After contributing mildly to the first quarter s
results, the treasury and investment bank seg-
ment made an explosive contribution to both
net income and pre-tax profit for the half-
year. Even so, its identifiable assets fell by
about $1 billion.
The retail and corporate banking segment
was on par with its performance in 2014. No
doubt, the increases in loans would help its
results in the latter half of the year.
The trust and asset management segment
delivered a 20.4 per cent increase in net income
and a 23 per cent improvement in pre-tax
Dividends, share price & future
FIRST paid an interim dividend of $0.58,
which is a slight increase from last half-year s
On September 30, 2014, FIRST s share price
was $36.44. This rose to $37.07 on January 5,
2015. The share price was quoted as low as
$35.21 on March 13, 2015 and ended last
Wednesday at $35.74.
Using a running EPS of $2.51, that price
reflects a P/E multiple of 14.24. If we project
an annual dividend of $1.20, the yield would
be 3.36 per cent.
(Based on recent history, unfortunately, after
the September elections, we are likely to see
some disruption to the board as new party
loyalists replace many of the incumbents.)
Republic Bank Ltd
Net interest income rose by 3.8 per cent to
$1.17 billion from $1.13 billion for the half-
year to March 2014. On the other hand, other
income declined, moving from 2014 s $793
million to $606.6 million in the current half-
year. The entire decline was recorded in the
second quarter as the figures fell from $497.4
million down to $296.7 million.
In sum, total operating income came in at
$1.78 billion; this represented a decline of 7.5
per cent from 2014 s $1.92 billion.
Despite higher compliance costs, operating
expenses fell by $119.8 million or 10.6 per cent
to $1.005 billion from the previous level of
$1.125 billion. In addition, the share of profits
from associated companies declined to $16
million from the previous half-year s $21 mil-
lion. Consequently, the operating profit for
the current period registered at $790.6 million;
this is $28.9 million or 3.5 per cent lower than
the $819.5 million earned in the 2014 half-
Fortunately, loan impairment expense reg-
istered at $23.2 million (2014: $53.4 million).
In addition, taxation, at $177 million, was $6.4
million lower than the previous period s $183.4
These changes helped RBL report an after-
tax profit of $590.4 million. After excluding
minority interests, the profit attributable to
shareholders registered at $572.7 million; this
was 2.1 per higher than the $560.8 million
recorded for the same period in 2014.
This result translated into EPS of $3.55 versus
$3.49 in 2014.
Changes in financial position
Total assets rose marginally to $59.7 billion
from $59.4 billion as at September 2014.
Loans and advances increased to $27.6 billion
from $27.1 billion, reflecting a rise of 1.8 per
cent. In addition, investment securities rose
by 7.2 per cent to $8.86 billion from the Sep-
tember year-end figure of $8.26 billion.
Conversely, cash resources fell by $657 mil-
lion or 3.3 per cent to $18.99 billion from the
previous level of $19.65 billion. Increases in
investments ($634 million), addition to fixed
assets ($153.5 million) and dividends to share-
holders ($483.6 million) were among the major
consumers of cash.
Total liabilities improved modestly to $50.95
billion from $50.63 billion. The major com-
ponent, customers deposits and other funding
instruments moved from $47.1 billion to $47.3
billion. As at September 2014, customers
deposits comprised $43.77 billion while other
funding instruments were valued at $3.36 bil-
Shareholders equity was essentially static
at $8.43 billion since the end of September
Retained earnings were marginally higher
at $5.85 billion from $5.79 billion. The other
reserves component fell to $642 million from
$744.4 million; negative comprehensive income
($112 million) and the purchase of shares for
the profit sharing scheme ($60 million) were
the main contributors to this reduction.
With 161,052,000 shares outstanding, each
share has a book value of $52.36 (September
With only a marginal increase in operating
income, profits at its local operations soared
by 21 per cent. The results in Barbados and
the Eastern Caribbean were adversely affected
by economic challenges in those territories.
Dividends and share price
RBL maintained its half-year dividend at
On September 30, 2014, RBL s share price
closed at $121.61. Since then, the price has
mostly been on a steady downhill slide. It
closed on December 31, 2014 at $119.74. On
April 9, 2015, it experienced its steepest fall,
moving to $116.00 from the previous day s
close of $117.79. Last Wednesday, the share
price closed at $114.93.
Perhaps, one reason for the steady price
decline might be the government s announced
intention to sell Clico s shares in RBL to other
At the start of its third quarter, RBL signed
an agreement to acquire the operations of RBC
Royal Bank in Suriname for US$39.8 million.
Also, by mid-May 2015, it was partially suc-
cessful in increasing its shareholding in HFC
Bank (Ghana) Ltd to 57.11 per cent. The cost
of acquiring the additional 17.25 per cent of
HFC s shares was US$26.23 million (about
Last Friday, shareholders were expected to
approve the formation of Republic Financial
Holdings Ltd, which, effective October 1, 2015,
would become the new parent company for
the RBL Group.
Half-year results for
FIRST & Republic Bank Ltd
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