Home' Trinidad and Tobago Guardian : February 16th 2017 Contents FEBRUARY 16 • 2017 guardian.co.tt BUSINESS GUARDIAN
STOCKS | BG15
Local RBC helps
RBCFCL's 2016 results
Amajor contributor to im-
proved results at RBC Finan-
cial (Caribbean) Ltd was the
huge reduction in impair-
Let us now review RBC Fi-
nancial (RBCFCL) results for the year ended
Changes in financial position
Total assets rose by 3.20 per cent to $85.3
billion from $82.6 billion.
Most of this increase was concentrated under
balances with central banks, which climbed
to $12.3 billion from $9.3 billion. The sale on
its Suriname operations in July 2015 impacted
the comparatives of several items on both the
assets and liability side.
Investment securities advanced to $13.96
billion from $13.45 billion. The largest compo-
nent, available-for-sale securities at fair value,
rose to $13.82 billion from $13.00 billion. Here,
treasury securities rose to $6.84 billion from
$5.13 billion and government and state-owned
debt moved to $5.2 billion from $4.95 billion.
The major decline was shown under corporate
debt securities, which fell to $1.69 billion from
Loans and advances to customers declined
to $36.7 billion from $36.9 billion. Notably,
gross mortgages fell to $15.9 billion from $16.4
Advances to commercial and corporate cus-
tomers edged up to $15.95 billion from $15.86
billion. Loans to retail customers fell to $6.07
billion from $6.39 billion.
Premises and equipment declined to $1.05
billion from $1.2 billion. Although additions
registered at $85.5 million, depreciation charg-
es consumed $159.3 million while disposals
reflected $100.2 million. Included in the latter
was $69.4 million related to its Suriname op-
erations, which were sold to RFHL.
Cash and equivalents closed at $10.03 billion
from $10.58 billion. Treasury bills climbed to
$5.0 billion from $3.88 billion while amounts
due from other banks fell to $3.99 billion from
Total liabilities increased by 2.6 per cent to
$67.1 billion from $65.4 billion.
Customers' deposits closed at $62.65 billion
from $60.85 billion, reflecting an improvement
of 2.97 per cent.
Deposits from both the state sector and con-
sumers declined; the former closed at $3.56
billion from $4.24 billion while the latter ended
at $26.4 billion from $31.9 billion. In contrast,
private sector deposits climbed by 36.6 per
cent to $30.4 billion from $22.3 billion.
Sums due to associates and affiliated com-
panies fell to $1.43 billion from $1.67 billion.
Other liabilities rose to $1.22 billion from
$1.10 billion. Here, the two largest increases
were noted under interest payable and "oth-
er"; the former rose to $118.9 million from $79
million while the latter jumped to $231 million
from $121.3 million.
Total equity improved from $17.21 billion to
$18.14 billion. After excluding non-controlling
interests of $796 million, shareholders' equity
closed at $17.35 billion (2015: $16.44 billion).
The two largest components of non-con-
trolling interests reflect accumulated retained
earnings from RBC Royal Bank Holding (Ba-
hamas) Ltd ($426.7 million) and Finance Cor-
poration of Bahamas Ltd, which accounted for
The accumulated deficit improved to $956.9
million from $1.52 billion. The brought forward
deficit was lowered by current year's profit of
$863 million and then increased by a transfer
to the statutory reserve of $106.2 million and
a comprehensive loss of $192.6 million. The
comprehensive loss reflected the re-measure-
ment of post-retirement benefit obligations.
Other components of equity improved from
a negative $205.1 million to a positive $34.3
million. Most of this reflected the benefits of
exchange differences on translating foreign
Each of its 12,946,494 shares outstanding
had a book value of $1,340.03 (2015: $1,279.74.)
Revenues and profit
Interest income grew marginally to $2.98
billion from $2.93 billion. The interest on loans
and advances to customers fell to $2.62 billion
from $2.63 billion.
However, interest on investment securities
improved to $350.9 million from $283.9 million
or by almost 24 per cent.
In contrast, interest expenses contracted to
$259 million from $352.5 million. The two most
prominent declines were shown under interest
on customers' deposits and other interest bear-
ing liabilities; the former fell to $232.6 million
from $290.1 million while the latter shrank to
$19.1 million from $50.4 million.
These changes saw net interest income
improve by 5.6 per cent to $2.72 billion from
Non-interest income expanded by 20.9 per
cent to $1.68 billion from $1.39 billion. This
improvement was driven by a 21 per cent in-
crease in fees and commissions to $1.15 billion
from $953 million.
Within this category, trust and investment
management fees declined to $224 million from
Both transaction service fees and credit
related fees advanced; the former closed at
$375.5 million from $321 million while the latter
climbed to $551 million from $388 million. Also,
foreign exchange earnings rose by 30 per cent
to $439 million from $338.5 million.
Non-interest expenses rose by 7 per cent
to $3.06 billion from $2.86 billion. Staff costs
declined to $1.32 billion from $1.33 billion. In
contrast, other operating expenses rose by 32
per cent to $942.7 million from $713.6 million.
Impairment losses on loans and advanc-
es contracted to $224.3 million from $356.1
Sixty-three per cent of that impairment fig-
ure ($141.6 million) was attributed to mortgag-
es. Although the sums not previously charged
and that are now being written off increased
to $402.4 million (2015: $324.3 million), the
recoveries also improved robustly to $185 mil-
lion from $34.6 million.
RBCFCL's share of both associated compa-
nies and joint ventures declined. In the case
of its associated companies, this contribution
fell to $3.1 million from $6.3 million.
This was impacted by the lower profitabil-
ity of its 31 per cent stake in DFL Caribbean
Holdings Ltd. With respect to its 33.3 per cent
stake in its joint venture real estate company,
RGM Ltd, its share of profits contracted to $1.3
million from $23.5 million.
These movements saw pre-tax profit from
continuing operations register at $1.12 billion
from $781 million, reflecting a 43 per cent im-
In 2015, taxes of $13 million combined with
the net loss from its Surinamese operations of
$122.3 million pulled down the net profit to
$645.5 million. In 2016, taxes of $164.4 million
resulted in an after-tax profit of $956.6 million.
These results translate to EPS of $73.89
(2015: $49.86.) However, the group still has
some way to go to completely erase its remain-
ing deficit of $956.9 million.
RBC Royal Bank (T&T) Ltd experienced 5
per cent growth in net interest income and 12.5
per cent improvement in non-interest income.
These factors, along with the loans impairment
moving from a negative $52 million to a positive
$72 million, helped this subsidiary record a
robust gain in its pre-tax profit picture.
At RBC Merchant Bank, net interest income
improved by almost 22 per cent. In addition,
non-interest income expanded by a factor
of almost 288 per cent. This subsidiary also
experienced positive loan recoveries, which
helped its pre-tax income to explode by 1,100
per cent, albeit from a small base.
Both the investment management and trust
company experienced profit declines.
The largest profit centres are located outside
of Trinidad. They include the very profitable
Bahamian operations, to which we alluded
This grouping also includes subsidiaries in
the Eastern Caribbean (Barbados, Grenada, St
Kitts & Nevis and St Vincent and the Gren-
adines). Operations in the Caymans, Dutch
Caribbean and British Virgin Islands also made
Share price of
Royal Bank of Canada is the parent company,
which share price, on the Toronto Stock Ex-
change, rose from C$71.27 on February 1, 2016
to C$95.42 on February 8, 2017; this reflected
an appreciation of 33.9 per cent.
During calendar 2016, investors were paid
quarterly dividends totalling C$3.24 (calendar
At the recent price, this reflects a yield of
3.40 per cent.
On February 24, 2017, shareholders will re-
ceive their first quarterly dividend of C$0.83.
On that same date, the bank will release its
results for Q1 2017 (period ended January 31,
On January 12, 2017, RBC Royal Bank (T&T)
Ltd initiated a voluntary separation and early
retirement offer to its permanent, full-time
At about the same time, and after many years
of bank resistance, trade union recognition for
its staff was obtained.
Anecdotal evidence suggests that relation-
ships between foreign owned companies and
local trade unions tend to be progressive and
relatively harmonious, when compared with
locally owned companies; let us see if that
tradition holds true in this case.
In the next article, we will turn the spotlight on
Massy Holdings Ltd 2016 results.
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