Substantial loan losses and an almost equal amount of “non-cash goodwill impairment” mainly related to its Bahamas operation have nullified another CIBC FirstCaribbean International Bank profit.
The Barbados-based financial institution’s chief executive officer (CEO) Rik Parkhill has reported that it recorded a $352 million net loss for the first nine months of its current financial year.
This is despite its earning of a increased $46 million profit by the end of the bank’s third quarter on July 31.
“Net income for the third quarter of [$46 million] showed significant improvement when compared with [$20 million] for the same quarter last year. Operating profit (total revenue less operating expenses) was [$94 million] for the third quarter compared with [$78 million] for the same period in the prior year,” Parkhill said.
However, he added: “For the nine months ended July 31, 2014, the bank recorded a net loss of [$352 million].
“These results have been affected by items of note, including [$230 million after-tax] of incremental loan losses and a non-cash goodwill impairment charge of [$232 million after-tax], both incurred during the second quarter of 2014.”
The CEO said when the above items and non-controlling interest were excluded, FirstCaribbean “generated $114 million] of net income for the period, compared to [$90 million] in the prior year”.
“Operating profit was [$274 million] for the nine months ended July 31, 2014, compared with [$252 million] for the same period in the prior year. Revenues were up slightly by one per cent or [$12 million] over the prior year primarily due to higher fee based volumes and foreign exchange activity,” he explained.
“Operating expenses were down two per cent or [$10 million] as a result of expense controls and savings from the ongoing restructuring programme. The bank’s Tier 1 and Total Capital ratios remain strong at 19.9 per cent and 21.2 per cent, well in excess of applicable regulatory requirements.” (SC)
