FirstCaribbean International Bank (Bahamas) Limited

Notes to Consolidated Financial StatementsYear ended October 31, 2009(Expressed in thousands of Bahamian dollars)1. General InformationFirstCaribbean International Bank (Bahamas) Limited (the “Bank”) was formerly named CIBC Bahamas Limited (“CIBCBahamas”) and was controlled by Canadian Imperial Bank of Commerce (CIBC), a company incorporated in Canada.The Bank changed its name to FirstCaribbean International Bank (Bahamas) Limited on October 11, 2002, following thecombination of the retail, corporate and offshore banking operations of Barclays Bank PLC in The Bahamas and the Turks& Caicos Islands (“Barclays Bahamas”) and CIBC Bahamas.The Bank is a subsidiary of FirstCaribbean International Bank Limited, formerly CIBC West Indies Holdings Limited (the“Parent” or “FCIB”), a company incorporated in Barbados, which owns 95.2% of the Bank. The Parent and its subsidiaries(collectively, the “Parent Group”) is owned by CIBC. From October 11, 2002, the major shareholders of FirstCaribbeanInternational Bank (Bahamas) Limited were jointly CIBC and Barclays Bank PLC, (“Barclays”), a company incorporated inEngland. On December 22, 2006, CIBC acquired Barclays’s interest in the Parent and now owns 91.4% of the shares ofFirstCaribbean International Bank Limited.The registered office of the Bank is located at the FirstCaribbean Financial Centre, 2nd Floor, Shirley Street, Nassau, Bahamas.2. Accounting PoliciesThe principal accounting policies applied in the preparation of these consolidated financial statements are set out below.2.1 Basis of presentationThe consolidated financial statements have been prepared on a historical cost basis, except for available-for-salesecurities, derivative financial instruments and financial assets and financial liabilities held at fair value through profitor loss, that have been measured at fair value. The carrying values of recognized assets and liabilities that are hedgeditems in fair value hedges, and otherwise carried at cost, are adjusted to record changes in fair value attributable to therisks that are being hedged. The consolidated financial statements are presented in Bahamian dollars, and all valuesare rounded to the nearest thousand, except when otherwise indicated.Statement of complianceThe consolidated financial statements of the Bank have been prepared in accordance with International FinancialReporting Standards (“IFRS”).Basis of consolidationSubsidiary undertakings, which are those companies in which the Bank directly or indirectly has an interest of morethan one half of the voting rights or otherwise has power to exercise control over the operations, have been fullyconsolidated. The principal subsidiary undertakings are disclosed in Note 29. Subsidiaries are consolidated from thedate on which the effective control is transferred to the Bank. They are de-consolidated from the date that controlceases.All inter-company transactions, balances and unrealized surpluses and deficits on transactions and balances have beeneliminated. Where necessary, the accounting policies used by subsidiaries have been changed to ensure consistencywith the policies adopted by the Bank. The financial statements of the subsidiaries are prepared for the same reportingyear as the Bank.The purchase method of accounting is used to account for the acquisition of subsidiaries by the Bank. The cost ofan acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred orassumed at the date of the exchange, plus costs directly attributable to the acquisition. Identifiable assets acquiredand liabilities and contingent liabilities assumed in a business combination are measured initially at their fair valuesat the date of acquisition, irrespective of the extent of any minority interest. The excess of the cost of acquisitionover the fair value of the Bank’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of theacquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly inthe consolidated statement of income.21