Notes to the Consolidated Financial Statements - FirstCaribbean ...

Management Discussion and Analysis
Barbados incl. EC Islands, Belize and Jamaica Trust
Geographical Business Segment
Financial Highlights (USD’000)
Restated
Actual Actual
2007 2006
Net interest income 117,146 106,492
Operating income 61,472 55,933
Total revenue 178,618 162,425
Operating expenses 93,374 90,277
Loan loss impairment 2,479 3,905
Total expenses 95,853 94,182
Net income attributable to the equity
holders of the parent 65,181 52,787
Loans and advances to customers 1,683,234 1,475,887
Customer deposits 2,858,224 2,563,362
Total assets 3,197,287 2,841,921
Net income for the Barbados Operations amounted to $65.2 million, an increase
over the prior year by $12.4 million (23%) and was driven mainly by the onshore
business.
Net interest income exceeded the prior year by $10.6 million (10%). Interest
income was up year on year by $26.8 million (16%) with onshore accounting
for $16.6 million and offshore for $10.2 million, both due to loan earnings and
placements interest resulting mostly from higher volumes, but also higher yields.
Interest expenses were also above the prior year by $16.1 million (25%) due to
both onshore of $12.0 million and offshore of $4.1 million, both due to higher
deposit volumes and cost of funds.
Operating income exceeded the prior year by $5.5 million (10%) due to the
onshore business resulting from higher foreign exchange earnings; card revenues;
and equity brokerage fees.
Operating expenses were above the prior year by $3.1 million (3%) with the
onshore business accounting for $2.7 million of the increase, driven mainly
by higher software depreciation due to a change in policy; business taxes; and
occupancy expenses; partially offset by lower benefit costs due to a change in
health benefits resulting in a curtailment gain.
Loan loss expenses were below the prior year by $1.4 million (37%) mainly in
the onshore business, with non-performing loans to gross loans for the onshore
operations standing at 6.0% compared with the prior year of 7.4% and for the
offshore operations standing at 0.9% compared with the prior year of 1.4%.
Taxes exceeded the prior year by $2.2 million (14%) due mainly to higher net
income before taxes.
Jamaica Operations (All lines of business)
The Group’s operations in Jamaica are mainly conducted in the Retail, Corporate
and Capital Markets business segments. This geographic segment has shown
significant growth year on year, as we have invested additional capital and
expanded the overall network and operations in Jamaica.
Jamaica Geographical Business Segment
Financial Highlights (USD’000)
Restated
Actual Actual
2007 2006
Net interest income 38,254 33,711
Operating income 10,043 7,551
Total revenue 48,297 41,262
Operating expenses 29,568 26,468
Loan loss impairment 1,799 1,451
Total expenses 31,367 27,919
Net income attributable to the equity
holders of the parent 11,356 9,054
Loans and advances to customers 445,373 363,310
Customer deposits 472,154 409,528
Total assets 586,913 497,081
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