A US$40.9 MILLION increase in loan loss expenses has cut CIBC FirstCaribbean International Bank’s net income by US$23.8 million for the six months ended April 30, 2012.
According to consolidated financial statements for the half-year, net income came to US$29.4 million.
Chairman Michael Mansoor said the increase in loan loss impairment was the key driver of this decline, reflecting the continued strained economic climate in the region and reducing collateral values.
He said the bank continues to work closely with clients to restructure facilities where appropriate to match available cash flows and meet their needs.
Meanwhile, revenues were up US$13.2 million year on year due to increases in net interest income and operating income of US$8.1 million and US$5.1 million, respectively.
“The increase in net interest income was driven mainly by reductions in funding costs and interest expenses related to hedging instruments while the increase in operating income was primarily due to the acquisition in September 2011 of CIBC Bank and Trust Company (Cayman) Limited and CIBC Trust Company (Bahamas) Limited, partially offset by lower securities gains,” the chairman said.
Operating expenses were up US$4.4 million, mainly driven by the acquisition and partially offset by continued expense control.
Taxation expenses were, however, down US$7.5 million due to lower earnings in taxable jurisdictions.
Mansoor told shareholders the bank continues to maintain a strong foundation with Tier I and Tier I and II capital ratios at 22 per cent and 23 per cent, respectively, well in excess of regulatory requirements.
The directors have approved an interim dividend of US$0.015 per share to be paid on June 29, 2012 to shareholders on record as at June 2012. (NB)