Bridgetown, Barbados, 14th September 2015 — CIBC FirstCaribbean announced its results for the third quarter of this fiscal 2015, recording its highest quarterly net income since the second quarter of fiscal 2010.
The Bank continued to deliver solid results against its strategic objectives of accelerating profitable revenue growth and improving operational efficiency by recording net income of $34.8 million in the third quarter, up $11.4 million or 49% over the prior year’s third quarter net income of $23.4 million.
For the nine month period ended July 31, 2015, net income was $87.0 million, up $31.9 million or 58% over prior year’s adjusted net income of $55.1 million for the same period.
Total revenue during the third quarter of fiscal 2015 increased by $7.1 million compared to the second quarter of fiscal 2015. Total revenue over the nine month period was down $7.9 million year over year primarily due to lower interest earnings from loans and securities. Some countries continue to experience low credit demand, additionally interest margins on loans and securities yields were lower.
While productive loans balances are down slightly over the prior year, an improved performance over the second quarter of 2015 was recorded with $80.6 million in loan growth as a larger proportion of the sales pipeline was converted into productive loans during the latter half of this quarter. Operating expenses over the nine month period were down by $3.0 million compared with the same period last year as we continue to benefit from expense control initiatives and savings from our restructuring program.
Loan loss impairment expense was significantly lower by $43.1 million compared with the prior period’s adjusted expense of $77.9 million due to an improvement in the loss experience and recovery activity. Additionally, non-productive loan balances were down 18% to $651 million compared with the same period last year as efforts continue to further strengthen the quality of our loan portfolio.
CIBC FirstCaribbean continues to make a number of investments across the region pursuing its growth objectives while also demonstrating its continuing commitment to the Caribbean.
The Bank just recently announced that the Rendezvous Branch in Barbados will be converted into a first-class sales centre catering to Platinum Banking, Business Banking, Corporate and International Banking customers. It has also opened new branches across the region, most notably the Santa Cruz mini-branch in Jamaica.
Another branch at Fairview in the Montego Bay area is under construction. Additionally, the Bank recently opened a Representative Office in Aruba and has plans to open a full service branch in 2016, as part of its expansion plan for the Dutch Caribbean.
The Bank’s focus is on improving customer experience is generating results across our three main business segments. The SWITCH campaigns targeting mortgages and credit cards, low interest rate offers, 100% auto loan campaigns, Loan Saturdays, and Talk to me Tuesdays are a few examples of new initiatives designed to enhance the bank’s value proposition for customers. In addition, considerable progress has been made on making our lending decision goal of 48 hour turnaround a reality, specifically in terms of auto loans in Barbados, Cayman, and Jamaica.
CIBC FirstCaribbean is particularly proud of its activities as the leading infrastructure financier among the commercial banks in the Caribbean. These projects are an important element in the enhancement of productivity, competitiveness and growth throughout the Caribbean region. The new cruise pier and terminal in BVI and power projects with utilities in Cayman and Jamaica are some notable examples of the bank’s infrastructure finance work.
The Bank’s Tier 1 and Total Capital ratios remain strong at 21.5% and 22.8%, well in excess of applicable regulatory requirements. We wish to thank the Board, management, staff and most importantly our clients for their loyalty and continuing support.