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FirstCaribbean Jamaica boosts investments, profit up one-third

CIBC FirstCaribbean International Bank Jamaica, FCIBJ, one of the quietest of the eight commercial banks, continued to build on its earnings post-pandemic, with a 39 per cent jump in profit at year ending October 2022.

Its annual earnings grew from $476 million to $663 million.

The bank benefited from higher revenue in the year and pumped billions into the purchase of additional investment securities.

Back in 2020, the apex year of the pandemic, the bank descended into red, with a loss of $273 million. The pandemic year served as a reset for global business, which in turn affected banking, pushing some into losses and forcing measures to shore up or safeguard capital amid the crisis.

FCIBJ’s local performance matched the 39 per cent rise in profit for the wider CIBC FirstCaribbean group, which operates banks in multiple countries of the Caribbean. The regional group earned US$176 million, up from US$126 million.

“During 2022, our region continued to show positive signs of recovery from the pandemic, with increased economic activity boosted by the improving tourism sector. Several of our clients who were impacted have begun to see revenues and profitability return,” CIBC FirstCaribbean said in its annual report.

Similar to other financial entities, its outlook remains sombre.

“However, new geo-economic challenges continue to impact our clients, resulting in inflationary pressures from rising prices, supply and logistics delays, and reduction in foreign direct investment,” the Caribbean bank added.

During the year, the Jamaican operation cut back on its outstanding loans; its deposits also dipped due to a one-off transaction.

“In 2021, FirstCaribbean International Bank (Jamaica) Limited negotiated an early settlement of deposit liabilities with the National Housing Trust, resulting in the derecognition of US$16.5 million in customer deposits payable at a fixed date and a gain of US$4.4 million. This gain was included in other operating income,” CIBC FirstCaribbean reported.

FCIBJ reported revenue of $8.9 billion, up from $8.4 billion.

During the year, the bank, which is headed by Nigel Holness, decided to invest more in securities, growing its portfolio of investment from $9 billion to $31 billion. Its profit of $633 million doubles to $1.3 billion when factoring for unrealised gains and losses on assets which the bank holds for eventual sale.

The bank’s loan portfolio, meanwhile, dipped slightly from $78.7 billion to $76.9 billion. However, its net value improved from $12.7 billion to $14 billion, which gives it a bigger buffer to defend against shocks. The 10 per cent growth in capital outperformed the average for commercial banks at 3.4 per cent.

FCIBJ is the sixth-largest of eight commercial banks operating in Jamaica. It is held by Barbados-based CIBC FirstCaribbean, which is owned by Canadian Imperial Bank of Commerce in Canada.

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