Bahamas - FirstCaribbean International Bank

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Notes to the Consolidated Financial Statements October 31, 2007 (expressed in thousands of Bahamian dollars) 28. Financial risk management (continued) F. Liquidity risk (continued) Maturities of assets and liabilities 0-3 3-12 1-5 Over 5 October 31, 2007 months months years years Total $ $ $ $ $ Assets Cash and balances with central bank 116,808 — — — 116,808 Due from banks 152,626 — — — 152,626 Derivative financial instruments 36,713 — — — 36,713 Financial assets at fair value through profit or loss 792,307 — — — 792,307 Other assets 32,662 — — — 32,662 Investment securities 102,310 108,915 459,387 222,549 893,161 Loans and advances to customers 243,785 260,733 397,769 1,513,688 2,415,975 Property and equipment — — — 26,954 26,954 Retirement benefit asset — — — 13,502 13,502 Goodwill — — — 187,747 187,747 Total assets 1,477,211 369,648 857,156 1,964,440 4,668,455 Liabilities Customer deposits 3,116,341 497,720 47,092 253 3,661,406 Derivative financial instruments 30,974 — — — 30,974 Debt securities in issue 620 — 20,000 — 20,620 Other borrowed funds 186,933 91,238 — — 278,171 Other liabilities 30,138 — — — 30,138 Retirement benefit obligations — — — 3,814 3,814 0-3 3-12 1-5 Over 5 months months years years Total October 31, 2006 $ $ $ $ $ (Restated) Total assets 1,442,081 441,335 1,007,379 1,533,166 4,423,961 Total liabilities 3,272,143 376,205 13,076 165,799 3,827,223 Net on balance sheet position (1,830,062) 65,130 994,303 1,367,367 596,738 Credit commitments 25,953 409,186 — — 435,139 The matching and controlled mismatching of the maturities and interest rates of assets and liabilities is fundamental to the management of the Bank. It is unusual for banks ever to be completely matched since business transacted is often of uncertain term and different types. An unmatched position potentially enhances profitability, but also increases the risk of losses. The maturities of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearing liabilities as they mature, are important factors in assessing the liquidity of the Bank and its exposure to changes in interest rates and exchange rates. Liquidity requirements to support calls under guarantees and standby letters of credit are considerably less than the amount of the commitment because the Bank does not generally expect the third party to draw funds under the agreement. The total outstanding contractual amount of commitments to extend credit does not necessarily represent future cash requirements, since many of these commitments will expire or terminate without being funded. Total liabilities 3,365,006 588,958 67,092 4,067 4,025,123 Net on balance sheet position (1,887,795) (219,310) 790,064 1,960,373 643,332 Credit commitments 107,714 255,229 647 — 363,590 See Auditors’ Report Page 56. 88
Notes to the Consolidated Financial Statements October 31, 2007 (expressed in thousands of Bahamian dollars) 28. Financial risk management (continued) G. Fair values of financial assets and liabilities The following table summarises the carrying amounts and fair values of those financial assets and liabilities not presented on the Bank’s balance sheet at fair value. Bid prices are used to estimate fair value of assets, whereas offer prices are applied for liabilities. Carrying value Fair value 2007 2006 2007 2006 Total Total Total Total $ $ $ $ (Restated) (Restated) Financial Assets Due from banks 152,626 297,817 152,626 297,817 Loans and advances to customers 2,415,975 2,425,951 2,381,257 2,391,090 Investment securities – loans and advances — 156,898 — 168,561 Financial liabilities Customer deposits 3,661,406 3,503,903 3,654,230 3,496,895 Other borrowed funds 278,171 281,344 277,231 281,240 Debt securities in issue 20,620 — 19,493 — Investment securities Fair value for investments designated as loans and advances is based on market prices or broker/dealer price quotations. Where this information is not available, fair value has been estimated using quoted market prices for securities with similar credit, maturity and yield characteristics. Where fair values still cannot be measured reliably, these securities are carried at cost less impairment. Availablefor-sale securities are measured at fair value. Customer deposits and other borrowed funds The estimated fair value of deposits with no stated maturity, which includes noninterest-bearing deposits, is the amount repayable on demand. The estimated fair value of fixed interest bearing deposits and other borrowings without quoted market price is based on discounted cash flows using interest rates for new debts with similar remaining maturity. 29. Critical accounting estimates and judgements in applying accounting policies Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year are discussed below. Due from banks Due from banks include inter—bank placements and items in the course of collection. The fair value of floating rate placements and overnight deposits is their carrying amount. The estimated fair value of fixed interest bearing deposits is based on discounted cash flows using prevailing money market interest rates for debts with similar credit risk and remaining maturity. Their carrying values approximate their fair values. Loans and advances to customers The estimated fair value of loans and advances represents the discounted amount of estimated future cash inflows. Expected cash flows are discounted at current market rates to determine fair value. The balances are net of specific and other provisions for impairment and their net carrying amounts reflect their fair values. See Auditors’ Report Page 56. 89
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FIVE YEARS SERVING THE CARIBBEAN
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Contents Notice of Meeting 3 Sectio
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Five Years of Being First Left to r
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Ownership Structure FirstCaribbean
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Main Branches and Centres ABACO ISL
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Willie Moss Attorney-at-Law Joseph
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Directors, Senior Management and Ad
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Chairman’s Report continued The a
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18 Group Chief Executive Officer’
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Chief Executive Officer’s Report
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Bahamas Managing Director’s Repor
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26 Strategic Business Units
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Retail Banking Commentary on overal
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Capital Markets Commentary on overa
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Corporate Banking Commentary on ove
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Wealth Management Commentary on ove
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Treasury, Sales & Trading Commentar
Page 40 and 41: Pradip Chhadva Managing Director Tr
Page 42 and 43: Human Resources/Marketing Commentar
Page 44 and 45: Juan M. Corral Managing Director Op
Page 46 and 47: Martin Griffiths Chief Risk Officer
Page 48 and 49: Management’s Discussion and Analy
Page 57 and 58: Financial Statements 2007 55
Page 59 and 60: Consolidated Balance Sheet As of Oc
Page 61 and 62: Consolidated Statement of Changes i
Page 63 and 64: Notes to the Consolidated Financial
Page 89: Notes to the Consolidated Financial
Page 93 and 94: FirstCaribbean International Bank (
Page 95: FirstCaribbean International Bank (
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Bahamas - FirstCaribbean International Bank

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