CIBC FirstCaribbean International Bank (Bahamas) is bracing for a $37 million net income decline given the economic outlook caused by the novel coronavirus (COVID-19), the bank’s Managing Director Marie Rodland-Allen revealed in her review of the bank’s results for the six months ended April 30, 2020.
Rodland said in her review that the expected credit losses because of the impact of COVID-19 on the economy have driven those forward-looking results, as compared to the bank’s $47 million net income result for the same period last year.
“Against this backdrop (COVID-19), the bank reported net income of $3 million for the six months ended April 30, 2020, compared to net income of $47 million for the same period in the prior year,” the review states.
“The six months’ financial results were negatively affected by $37 million of provision for credit losses, which reflects our revised forward-looking views for probability of defaults, loss given defaults and macro-economic forecasts driven by the extent and timing of the anticipated impact from COVID-19.
“Excluding this material change, the bank generated net income of $40 million. The bank’s performance was adversely affected by lower revenues due to declines in U.S. interest rates and higher expenses due to increased administrative costs.”
Rodland said despite this near-term economic outlook, the bank will provide its shareholders with an interim dividend of nine cents ($0.09) per share, “subject to regulatory approval and upon the Central Bank’s lifting of its current suspension of dividend approvals”.
She added that the bank’s tier one and total capital ratios remain in excess of the regulatory requirements, at 24.9 percent and 24.7 percent.
“COVID-19 is unprecedented,” said Rodland. “I am extremely proud of the commitment all of our employees have demonstrated in continuing to serve our clients through these difficult times. We have made accommodations for many to work from home.
“As an essential service, we have erected plexiglass screens in branches, installed hand sanitizer dispensers in all our facilities, provided employees with masks and implemented new protocols to ensure the safety of both our employees and clients.
“With the contraction in economic activity, cash flow is critical to keeping businesses and households afloat. To support our clients we have offered up to six-month moratoria on loans on request and three-month automatic moratoria on credit card payments. Encouragingly, we have seen increased usage of our digital offerings – online and mobile banking.”
Rodland said CIBC FirstCaribbean is committed to increasing its digital banking experience through the COVID-19 pandemic.
The post CIBC FirstCaribbean bracing for $37M net income decline amid COVID-19 appeared first on The Nassau Guardian.
source https://thenassauguardian.com/2020/05/29/cibc-firstcaribbean-bracing-for-37m-net-income-decline-amid-covid-19/
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