PanCaribbean Posts Strong Third Quarter Results

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For its third quarter ended September 2010, Pan Caribbean Financial Services Limited (PCFS) reported consolidated net income of $454 Million, up 17% over last year’s $389 Million. Earnings per share were $0.82 for the current quarter versus $0.71 for the corresponding period last year. These results were positively influenced by improved margins, balance sheet growth and lower provisioning.

For its third quarter ended September 2010, Pan Caribbean Financial Services Limited (PCFS) reported consolidated net income of $454 Million, up 17% over last year’s $389 Million. Earnings per share were $0.82 for the current quarter versus $0.71 for the corresponding period last year. These results were positively influenced by improved margins, balance sheet growth and lower provisioning.

Ordinary dividends of $0.49 per share was declared during the third quarter and paid in October 2010. The consolidated balance sheet grew $72.2 Billion, up 11% and positively influenced net interest income. The Group’s investment portfolio rose 19% per cent to $57.7 Billion while interest bearing liabilities grew $4.2 Billion to $60.4 Billion, up 7%, compared to $56.2 Billion at December 2009.

Donovan H. Perkins, President and CEO of PanCaribbean noted, “We enjoyed a good third quarter, and all lines of business contributed to this solid performance in a very competitive market.”

For the nine-month period ended September 2010, PCFS reported consolidated profit of $1,082 Million, compared to $1,111 Million in the corresponding period last year. Year-to-date, net interest income increased by 4% to $2,008 Million from $1,932 Million in 2009. The balance sheet grew 7% overall. Fees and Commissions rose 38% and Trading Income climbed 16% to $296 Million and $304 Million respectively, Fees and Commissions benefited from business activities related to stockbrokerage, asset management and credit-related transactions according to Mr. Perkins. He went on to indicate however, that ”With the appreciation of the Jamaican currency since the start of the year, foreign currency translation losses of $124M had an adverse impact on non-interest income, compared to gains reported last year”. Excluding this item, year-to-date profits would have been up 5%.

Pan Caribbean’s expectations are for a stable currency environment through 2010 and into 2011.
The Group’s credit portfolio reflected some deterioration with non-performing ratio at 4.6% of the portfolio (industry average 5.6%) versus 2.6% of the portfolio at December 2009. “The weak economy has taken its toll on both individuals and companies, and the financial industry has seen a rise in problem loans.” According to its release to shareholders via the Jamaica stock Exchange, the company indicate that “the portfolio is being carefully monitored and proactive measures are being taken to contain and improve the situation to ensure that asset quality ratios are restored to target levels.”

The Group’s capital to assets ratio stood at 13.5% and risk-weighted capital ratio at 31.2%, highlighted PanCaribbean’s key measures of its financial strength and stability. Stockholders’ equity closed the quarter at $9.8 Billion over $7.9 Billion at December 2009, as its bond portfolio appreciated with improvements reflected in its fair value reserves, and growth in retained earnings.

During the quarter, the Group continued its support of the development of young promising athletes by sponsoring the All Jamaica Junior Championships in Kingston and the Junior Championships in Montego Bay, in which 250 young tennis players displayed their skills on the courts. “We also partnered with our parent company, Sagicor to participate in the Grace Kennedy 5K in support of the event’s mandate to improve access to education for children living in inner city communities. This was also a great team-building exercise,” Perkins said.

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Carlette DeLeon
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