Capital & Credit Merchant Bank (CCMB) continues to re-position
its business strategy to meet the significant challenges in
the local and international financial markets. The group continues
to operate in a declining spread environment, with yields
locally being stable to declining, and overseas interest rates
continuing to persistently increase, both in the United States
and in the Caribbean region.
In light of this, the bank and its subsidiaries continue to
pursue the strategy started mid-2005 of building its Non-Proprietary
Income streams; combined with restructuring its balance sheet,
selectively acquiring higher-yielding assets, while managing
the cost of acquired funds and pursuing general cost-containment.
These initiatives have proven to be relatively successful
as the group has maintained its Net-Interest Income at $252.77
million for the quarter, while simultaneously constraining
the overall size of its balance sheet.
This has occurred despite the announcement by the United States
Federal Reserve Board of interest rate hikes totalling 200
basis points over the comparative quarters 2005/2006.
Another important effect of the strategy already being realised
is a notable improvement in the area of Non-Interest Expenses:
$422.4 million for the first six months of 2006 compared to
$492.6 million in the comparative period, 2005. This 16 per
cent decrease is primarily attributable to a reduction of
CCMBs Loan Portfolio profile has also benefited from
the change in strategic direction. Loans at the end of the
second quarter stood at $3.38 billion, a 35 per cent increase
over the comparative quarter in 2005.
For the period ended June 30, the group generated Net Profit
after Tax of approximately JA$132 million, compared to just
under $394 million in the comparative quarter 2005. This is
primarily due to the reduction in trading gains during the
period from $400 million in the comparative quarter, to approximately
$80 million in the current quarter.
As explained by the Bank President and CEO, Curtis Martin,
It is important to state that a significant part of
Capital & Credits earnings over the comparative
period and beyond in 2005 came from the liquidation of the
Equities portfolio to facilitate the groups banking
activities. The gains realised from the sale of these shares
amounted to approximately JA$262.4 million last year, and
we have not replicated this level of activity since.
The organisations total assets increased to just over
$56 billion, compared to approximately $54.5 billion for the
comparative period 2005.
The banks capital base as reflected in total Stockholders
Equity was $4.7 billion at the end of the second quarter 2006,
strengthened by Net Profit Earnings of $478 million for the
first six months of 2006.
The quality of the capital base is also enhanced by the transfer
of $432.4 million from un-appropriated profit to retained
In giving an update about the status of the technological
transformation component of the organisations consolidation
strategy, chairman and CEO of the Capital & Credit Financial
Group, Ryland T Campbell, stated that the group has
made significant progress in its implementation of new technology.
It is expected that the new technology will improve not only
efficiency, but also the groups capability, particularly
in respect of customer service and access; product origination
and competitiveness; as well as improved corporate reporting,
planning and research.
Implementation of the new technological platform,
Mr Campbell says, is anticipated for the first quarter