These three pedestrians appear captivated by the design of RBTT Bank's Half-Way Tree, Kingston branch. Reports that FirstCaribbean plans to buy RBTT Financial Holdings continue to be nixed by both parties. - File

Linda Hutchinson-Jafar, Business Writer

Trinidad-headquartered RBTT Financial Holdings Limited (RBTT) continues to deny Caribbean-wide media reports that it is close to being sold off to FirstCaribbean International Bank, even as labour unions continue to scurry for information.

"It's all market speculation. It's the same statement we have been making since last November when it was widely reported then that RBTT was about to be sold or enter into a merger, " a bank official in Port of Spain told the Financial Gleaner Thursday.

FirstCaribbean continued to treat the issue as a market rumour yesterday, even as labour unions in Kingston were reportedly to meet with RBTT Jamaica for assurances about staff in the event a deal was struck.

"It is not our policy to comment on market rumour," said Debra Johnson, head of corporate and internal communications, from FirstCaribbean's regional headquarters in St Michaels, Barbados, speaking with the Financial Gleaner by email.

A statement from Group Chairman Peter July, in response to a Guardian report that a deal was imminent, was a lot more forthright.

"While it is RBTT's policy not to comment on market speculation or to disclose the nature of any commercial discussions, I confirm that RBTT has not, I repeat not, agreed to the sale of the bank or to a merger with any third party," said July.

"On November 29, 2006 we made a public statement to the effect that RBTT has had, and continues to have discussions of a strategic nature regarding its portfolio. Discussions of this nature have been on-going for at least the past two years and continue.

"I can assure you that if and when a transaction materialises, our board of directors will fulfill its responsibility to make an appropriate announcement."

The possibility of two regional powerhouses combining forces continues to excite the market.

Quoting unnamed sources, the Trinidad Guardian said the board of directors has already taken a conditional decision to sell the bank and that the sale agreement is subject only to the completion of a due diligence exercise by RBTT on FirstCaribbean, a subsidiary of CIBC.

RBTT which includes ten commercial banks with branches located throughout the English-speaking Caribbean, Suriname, the Netherlands Antilles and Aruba posted pre-tax profits of US$139 million for its nine months to December 2006.

The Group's core business continued to grow across all its markets in the period.

Its assets had climbed by one billion year on year to $7.4 billion, boosted by a near doubling of its cash position, and US$500 million in loan growth to $3.5 billion.

FirstCaribbean started the financial year 2007 on a positive note with the first quarter performance showing further growth in net interest income to US$191 million, an increase of 39 per cent on a year-on-year basis to January 2007.

Over the past four years, net interest income has generated around 66 per cent of total revenue.

Cherelyn Elbourne, research analyst at CMMB Trinidad said in a commentary that FirstCaribbean continued to adhere to its five-year integration strategy for the Jamaica, Curacao and Trinidad and Tobago initiatives to reclaim market share from regional competitors while growing its loan portfolio and asset base.

"Given the Group's cash rich position with cash in excess of US$2.5 billion, the bank is expected to continue its expansion thrust within the Caribbean, " said Elbourne.

CIBC's CEO Gerry McCaughey has said that FirstCaribbean has a history of making smaller acquisition which add to earnings growth while expanding its footprint in the region.

Challenge

He anticipates that over the next three to five years that First-Caribbean may have enough capital to reinvest butanticipates the challenge of limited acquisition opportunities in the region.

In early December 2006, CIBC took a majority stake in FirstCaribbean, with the takeover transacted through its subsidiary CIBC Investments Cayman Limited (CICL).

The company acquired an additional 43.7 per cent, boosting its total holdings up to 87 per cent.

On 22 December 2006, CIBC made an offer to acquire minority shares at US$1.63, at the close of which the bank grew its holdings to 91.5 per cent, reducing minority interests to 8.5 per cent at the end of January 2007 after declaring the offer closed.

Nudged by regulators, the offer has been extended to April 27.

business@gleanerjm.com