CIBC FirstCaribbean has announced its best quarterly financial performance in four years.
For the three months ended Jan. 31, 2015, the Bank recorded net income of US$26.6 million, which is its best performance since 2010.
“Our results were driven by lower loan loss impairment expenses and lower operating expenses. This is a solid improvement in our performance when compared with net income of $15.4 million for the same period last year,” CEO Rik Parkhill said in making the announcement.
The improved performance comes despite a decrease in total revenue of US$7.3 million year-over-year. The CEO noted that this decrease was primarily due to lower loan earnings and lower gains from investment security sales.
However, he added that operating expenses were down by US$4 million compared with the same period last year, as the bank continues to benefit from expense control initiatives and savings from the ongoing restructuring of its operations.
Loan loss impairment expenses, which featured heavily in the Bank’s recent results, were also down significantly by US$14.9 million compared with the prior year. Parkhill noted that this is the third consecutive quarter of reduced loan loss levels year-over-year.
The challenges being faced by regional economies continue to have an effect on the bank’s performance. The CEO noted that this is consistent with the experience of the industry region-wide. The challenging credit environment, which continues to affect some of the markets CIBC FirstCaribbean operates in, has also been a factor in the Bank’s performance.
Three years ago, the bank embarked on a comprehensive programme of remediating its operations to achieve its goal of improved performance. That programme comes to an end in October 2015.
Parkhill said that the bank will continue to follow this in order to return to consistent levels of profitability.
“To ensure that we deliver consistent, sustainable results, CIBC FirstCaribbean’s focus remains on deepening our relationships with our clients and being their leading bank,” he said.
CIBC FirstCaribbean’s Tier 1 and Total Capital ratios remain strong at 20.9 per cent and 22.1 per cent, which is well in excess of applicable regulatory requirements.