FirstCaribbean International Bank (Bahamas) Limited

Management’s Discussion and Analysis of
Operating Results and Financial Condition
order to improve operating efficiency, the Bank continues to
manage its expenses by seeking out opportunities to reduce
the overall costs and has nonetheless maintained the overall
ratio of operating expenses to revenues below 50%.
Summary Balance Sheet
B$(000)
2004 2003
Assets
Cash and due from banks 864,055 1,111,395
Securities 452,145 334,705
Loans 1,669,007 1,497,105
Other assets 275,776 270,095
3,260,983 3,213,300
Liabilities and shareholders' equity
Deposits 2,707,621 2,670,897
Other liabilities 28,270 41,663
Shareholders' equity 525,092 500,740
3,260,983 3,213,300
The Bank’s total assets grew by 1.5% or $47.7 million over
last year to $3,261 million at the end of 2004. This growth
is attributable to the strong growth in mortgages and the
increase in commercial loans.
Securities
The Bank maintains an investment portfolio of securities
and a trading portfolio of securities.
The investment securities are securities which the Bank
intends to hold to maturity and represent debt securities
issued by the Government or its related agencies. The B$
investment securities therefore form a part of the liquid
assets requirement prescribed by the Central Bank of the
Bahamas. The investment securities portfolio increased by
$14 million to $178.8 million at the end of this fiscal year.
Trading securities are securities which are acquired for the
purpose of generating a profit from short-term-fluctuations
in price or dealer’s margin. The trading securities, which
increased by $103 million during the year, consist of
government bonds, corporate bonds and asset-backed
securities.
Loans
Gross loans grew by $178 million or 12% from last year to
$1,715 million at October 31, 2004. Total loans, i.e., net of
the allowance for loan losses, was $1,669 million at the end
of this fiscal year.
A significant portion of this increase is represented by the
continued strong growth in residential mortgages which
resulted in total mortgages increasing by $112 million or
18% over last year. Commercial loans, including loans to
governments, also increased by $43 million, notwithstanding
the repayments during the year of some
significant business loans. Personal loans rose by $23
million from last year end.
$1,700
$1,669
$1,650
$1,600
$1,550
$1,500
$1,450
$1,513
$1,497
$1,400
$1,350
Cash and Due from Banks
Cash and due from banks decreased by $247 million at the
end of 2004 as funds were shifted to the trading securities
portfolio as well as used to fund the growth in loan
balances.
26
$1,300
$1,250
$1,200
2002 2003 2004