Milton Brady, managing director of First-Caribbean International Bank Jamaica Limited.File

Driven by strong loan growth and a billion dollar increase in revenues, FirstCaribbean Inter-national Bank Jamaica Limited (FCIBJ) ended its financial year with bigger profits on operations and at the bottomline, as well as a substantially stronger balance sheet and a wider capital base of $5.6 billion.

Taken in its entirety, the bank's accounts at year-end October 31, 2007, were substantially better than a year ago, reflecting 31 per cent growth in both net profit and loans, 35 per cent improved revenues, 24 per cent growth in customer deposits and asset growth of 27 per cent.

And, according to managing director, Milton Brady, FCIBJ exceeded even its own forecasts.

Notwithstanding its profit performance, FCIBJ, which is expanding its network of branches, has decided not to pay returns to minority shareholders this year.

"Given the decision to raise $1,500 million in debt and to transfer $460 million from retained earnings to statutory reserve fund to support the continued strong growth, of our business," said chairman Michael Mansoor, in a note to shareholders, "the board recommends that no dividend be paid for the year."

In fact, a review of the six-year-old bank's dividend history reveals that it has paid out no returns from profits in the past three years.

The last time the bank paid dividends, Brady said, was in 2003. Since then the focus has been on growth.

"Our strategy now is to plow back all of the profits into the business," said the banker, adding that will continue as long as the bank continues to grow. That policy he said extends to both minority shareholders and its parent, adding that the latter was "pumping in money, not taking out", in reference to a US$20 million equity injection last year.

Brady was non-committal on when that would change, but said shareholders were getting getting their returns from the capital gains in the listed share price. The stock is now averaging $27 per unit, having traded within a band of $17.50 and $39.10 within the past year.

During the review year, First-Caribbean Jamaica made net profit of $771 million to return earnings per share of $2.90.

Figures

But that figure, when trimmed of a one-time after-tax gain of just under $55 million, reflects bottomline profit of $716 million or growth of 27 per cent compared to $588.9 million and earnings per share of $2.41 reported at October 2006.

"Effective January 1, 2007, certain changes to the group's health benefit scheme were made which resulted in the recognition of a curtailment gain of $54.9 million net of taxes," said the bank in the notes to the accounts.

The bank's 2007 performance - boosted by three international awards - was matched against restated figures for the 2006 financial year.

"During the period, management revised its hedge accounting and as a result, net income was reduced by $16 million in the fourth quarter and the prior year restated reducing net income by $36 million," said, seated in his office at the bank's corporate headquarters on Kntsford Boulevard, New Kingston