CIBC First Caribbean reports 84.9% net income drop

Attributing a decline in business activity to the COVID-19 pandemic, CIBC FirstCaribbean International Bank has reported an 84.9 percent drop in net income for the first nine months of the year ending July 31, 2020.

The bank’s third quarter review reflected net income of $10.7 million for the period, which is down $60.1 million from the same period last year.

Managing Director Marie Rodland-Allen said the primary driver of the year-over-year decline is the bank’s projection of increased credit losses as a result of the COVID-19 pandemic.

“Results have also been impacted by the steep decline in US interest rates and the overall decline in business activity. During this difficult period, the bank continues to place emphasis on supporting our clients as well as reducing our discretionary expenditures,” she said in the bank’s managing director’s review of the results for the quarter.

“At a meeting on September 15, 2020, the directors approved an interim dividend of nine cents per share, subject to regulatory approval and upon the Central Bank’s lifting of its current suspension of dividend approvals. Our tier one and total capital ratios remain strong at 25.5 percent and 25.6 percent in excess of the regulatory requirements.”

In March, the Central Bank of The Bahamas mandated that lending institutions offer loan deferrals to borrowers who lost their jobs because of COVID-19 for a three-month period, which as of April stood at $1.9 billion, which represented approximately 38 percent of private sector credit.

Of the loans deferred since the start of the pandemic, consumer loans accounted for $832.4 million (45 percent) of the deferred facilities, residential mortgages accounted for $725 million (39.2 percent) and commercial loans accounted for $292.3 million (15.8 percent).

Last month, Bahamas Clearing Banks Association (BCBA) President Kenrick Brathwaite said continued deferrals into 2021 would be catastrophic for the banking sector.

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source https://thenassauguardian.com/cibc-first-caribbean-reports-84-9-net-income-drop/