Four com­mer­cial banks head­quar­tered in Port of Spain de­clared to­tal, au­dit­ed af­ter-tax prof­its of $4.78 bil­lion in their 2024 fi­nan­cial years.

The four banks—Re­pub­lic Fi­nan­cial Hold­ings Ltd (RFHL), RBC Fi­nan­cial (Caribbean) Ltd, First Cit­i­zens Group Fi­nan­cial Hold­ings and Sco­tia­bank T&T—re­port­ed to­tal af­ter tax prof­its of $4.25 bil­lion in 2023, in­di­cat­ing that their prof­itabil­i­ty in­creased by 12.47 per cent in 2024.

One of the rea­sons for the stronger prof­itabil­i­ty of the bank­ing sys­tem last year was that banks pro­vid­ed more cred­it fa­cil­i­ties to their cus­tomers. In its No­vem­ber Mon­e­tary Po­lice Re­port, the Cen­tral Bank ob­served: “In Sep­tem­ber 2024, cred­it to the pri­vate sec­tor record­ed an in­crease of 7.9 per cent (year-on-year), up from a rise of 6.7 per cent in April 2024. Over the pe­ri­od, dou­ble-dig­it growth rates were ob­served for con­sumer and busi­ness lend­ing, out­pac­ing the ex­pan­sion in re­al es­tate mort­gage lend­ing.

“A pick­up in ac­tiv­i­ty and favourable fi­nanc­ing con­di­tions fu­elled busi­ness bor­row­ing over the pe­ri­od. In Sep­tem­ber 2024, busi­ness lend­ing grew by 11.8 per cent (year-on-year), up from 9.5 per cent five months ear­li­er. Com­mer­cial bank lend­ing to busi­ness­es record­ed an in­crease of 11.9 per cent, while non-banks record­ed an in­crease of 10.6 per cent over the pe­ri­od.”

In the 2023 Fi­nan­cial Sta­bil­i­ty Re­port, the Cen­tral Bank not­ed that a post-pan­dem­ic re­cov­ery, which was marked by a pick-up in house­hold and busi­ness debt.

“In par­tic­u­lar, the debt ap­petite was boost­ed by re­duced eco­nom­ic un­cer­tain­ty, low in­ter­est rates, im­prove­ments in the labour mar­ket, and gen­er­al­ly favourable fi­nan­cial con­di­tions. Bank­ing sec­tor cred­it to house­holds and busi­ness­es—the largest com­po­nent of pri­vate sec­tor debt—ex­pand­ed in 2023, sur­pass­ing pre-pan­dem­ic growth rates.”

The Fi­nan­cial Sta­bil­i­ty Re­port, in foot­notes, said eco­nom­ic un­cer­tain­ty can be de­fined as a sit­u­a­tion in which in­di­vid­u­als and firms do not have per­fect knowl­edge about the cur­rent state of the econ­o­my. The Trinidad and To­ba­go Eco­nom­ic Pol­i­cy Un­cer­tain­ty In­dex re­duced to mod­er­ate lev­els in 2023, com­pared to el­e­vat­ed lev­els in 2022. House­hold debt com­pris­es cred­it ex­tend­ed to house­holds in­clud­ing open ac­counts, per­son­al loans, cred­it card fa­cil­i­ties, mort­gage ad­vances, in­stal­ment sales trans­ac­tions and lease agree­ments.

But the re­port of in­creased bank prof­itabil­i­ty comes amid on­go­ing con­cern about the in­equitable dis­tri­b­u­tion of for­eign ex­change by T&T’s au­tho­rised deal­ers of for­eign ex­change and calls by busi­ness groups to ad­dress the is­sue.

A re­port by the T&T Cham­ber of In­dus­try and Com­merce in Jan­u­ary ti­tled ‘Chal­lenges in Ac­cess­ing For­eign Ex­change’ in­di­cat­ed that “80.2 per cent of 111 re­spon­dents per­ceive large busi­ness­es as re­ceiv­ing pref­er­en­tial ac­cess to for­eign ex­change, which puts SMEs at a dis­ad­van­tage.” Eight of the 13 au­tho­rised deal­ers of for­eign ex­change in T&T are com­mer­cial banks.

RFHL

In his dis­cus­sion and analy­sis of the group’s 2024 re­sult, group pres­i­dent and CEO of Re­pub­lic Fi­nan­cial Hold­ings Ltd (RFHL), Nigel Bap­tiste said the fi­nan­cial hold­ing com­pa­ny record­ed prof­it at­trib­ut­able to eq­ui­ty hold­ers of the par­ent of $2.0 bil­lion for the year end­ed Sep­tem­ber 30, 2024, an in­crease of $255 mil­lion or 14.57 per cent com­pared to the prof­it of $1.75 bil­lion re­port­ed in the pri­or year.

Those re­sults re­flect­ed the re­turns from growth in the group’s ad­vances and in­vest­ment port­fo­lios, and re­duced cred­it loss ex­pens­es, said Bap­tiste.

T&T is by far the largest gen­er­a­tor of prof­its for RFHL, earn­ing $2.778 bil­lion in prof­it at­trib­ut­able to share­hold­ers of the par­ent of the bank hold­ing com­pa­ny, which was an in­crease of 30.05 per cent com­pared to the $2.136 bil­lion de­clared for 2023. RFHL’s elim­i­na­tions and ad­just­ments to­talled $1,87 bil­lion in 2024.

In 2024, Re­pub­lic Bank Ltd, RFHL’s T&T op­er­a­tion, de­clared $2.379 bil­lion in net in­ter­est in­come (which is in­ter­est in­come mi­nus in­ter­est ex­pense), which was 9.58 per cent more than in 2023.

The 9.58 per cent in­crease in RFHL’s net in­ter­est in­come in T&T was dwarfed by 17.8 per cent in­crease in Guyana and the 36.9 per cent in­crease in Suri­name.

RFHL’s T&T net in­ter­est in­come in 2024 amount­ed to 46.90 per cent of the group’s to­tal net in­ter­est in­come of $5.066 bil­lion for that year.

“In T&T, net in­ter­est in­come grew by $208 mil­lion, be­ing the net im­pact of in­creas­es in in­ter­est in­come and in­ter­est ex­pense of $283 mil­lion and $75 mil­lion re­spec­tive­ly. The in­crease in in­ter­est in­come was gen­er­at­ed pri­mar­i­ly from the growth in the ad­vances port­fo­lio, cou­pled with the con­tin­ued high­er in­ter­est rates on US-dol­lar de­nom­i­nat­ed in­vest­ments in the ear­li­er part of the year,” said Bap­tiste, in his analy­sis of RFHL’s 2024 re­sults.

“The $75 mil­lion in­crease in in­ter­est ex­pense main­ly stemmed from high­er in­ter­est rates on the Bank’s US$150 mil­lion debt. Due to the in­creas­ing in­ter­est rates, a strate­gic de­ci­sion was made to re­pay this bond in June 2024,” he said.

RFHL ex­pe­ri­enced a 13.3 per cent in­crease in its net loans and ad­vances in T&T in 2024, ris­ing to $34.20 bil­lion from $30.18 bil­lion, which was over $4 bil­lion.

First Cit­i­zens Group

The First Cit­i­zens Group record­ed prof­it af­ter tax­a­tion (PAT) of $956.91 mil­lion for the year end­ed Sep­tem­ber 30 2024, which was 23.2 per cent more than the $776.75 mil­lion the com­pa­ny earned in its 2023 fi­nan­cial year.

The group record­ed an 11.14 per cent in­crease in its net in­ter­est in­come, which rose to $2.064 bil­lion in its 2024 fi­nan­cial year from $1.857 bil­lion in 2023.

In its man­age­ment dis­cus­sion and analy­sis, First Cit­i­zens said the ma­jor con­trib­u­tors to the in­crease in net in­ter­est in­come are:

• Loan port­fo­lio av­er­age bal­ance in­creased by $1.1 bil­lion;

• Loan in­come yields in­creased to 7.37 per cent from 7.25 per cent in 2023;

• In­vest­ment port­fo­lio av­er­age bal­ance in­creased by $1.4 bil­lion;

• In­creased in­vest­ment in­come yields to 5.8 per cent from 5.5 per cent in 2023; and

• Re­duc­tion in bonds payable av­er­age port­fo­lio by $0.6 bil­lion.

This was off­set by:

Off­set by:

• In­crease in de­posit in­ter­est ex­pense by $14.5 mil­lion, at­trib­uted by the cost of fund­ing in­creas­ing to 0.22 per cent in 2024 from 0.18% in 2023

Sco­tia­bank T&T

Gayle Pa­zos, se­nior vice pres­i­dent and man­ag­ing di­rec­tor of Sco­tia­bank T&T and head, Caribbean South and East, said the bank re­alised net in­come af­ter tax of $658 mil­lion, for the fi­nan­cial year end­ed Oc­to­ber 31, 2024.That was an in­crease of 0.48 per cent com­pared to the $655.31 mil­lion the bank earned in 2023, which was re­stat­ed for the adop­tion of IFRS 17 ac­count­ing stan­dard on its in­sur­ance seg­ment.

“We de­liv­ered an­oth­er strong year of re­sults, with record break­ing loan growth of $2.1 bil­lion, the largest year­ly growth in our his­to­ry, as a re­sult of tremen­dous col­lab­o­ra­tion across all of our teams; re­tail, com­mer­cial, trea­sury, in­sur­ance and wealth...

“We reg­is­tered growth across all core busi­ness seg­ments, with net in­ter­est in­come grow­ing by $90 mil­lion or 7 per cent, bol­stered by record net loan vol­ume growth and the

im­pact of im­proved US rates on our in­vest­ment port­fo­lio. This was off­set by a de­cline in oth­er in­come of $23 mil­lion or 4 per cent due to low­er trad­ing rev­enues dri­ven by pre­vail­ing mar­ket con­di­tions.”

Sco­tia­bank is list­ed on the T&T Stock Ex­change and is close to 51 per cent owned by Sco­tia­bank in Cana­da.

RBC Fi­nan­cial (Caribbean) Ltd

RBC Fi­nan­cial record­ed net in­come of $1.165 bil­lion in its fi­nan­cial year end­ed Oc­to­ber 31, 2024. That was 8.48 per cent more than the $1.074 bil­lion the bank earned for the 12-month pe­ri­od end­ed Oc­to­ber 31, 2024.

“In fis­cal 2024, the com­pa­ny re­alised high­er rev­enue of $177.6 mil­lion (5.6 per cent). This was dri­ven by high­er in­ter­est rates on the se­cu­ri­ties port­fo­lio, high­er loan vol­umes across the re­gion with fee in­come rel­a­tive­ly sta­ble year on year, main­ly from trasn­ac­tion­al vol­umes as therewere no fee in­creas­es in the past year,” said Dar­ryl White, the CEO of the bank.

“The re­sults were part­ly off­set by a high­er cost of funds giv­en changes in the un­der­ly­ing in­ter­e­strate en­vi­ron­ment. Net pro­vi­sions for cred­it loss­es have in­creased over 2023, but are still in a net cred­it po­si­tion as the pri­oe year in­clud­ed a high­er re­lease of pro­vi­sions.”

Why these four banks?

T&T has nine com­mer­cial banks, so why did we choose RFHL, First Cit­i­zens, Sco­tia­bank T&T and RBC Fi­nan­cial (Caribbean)?

* Those four are the largest com­mer­cial banks head­quar­tered in T&T;

* They are al­so ei­ther list­ed on the Trinidad and To­ba­go Stock Ex­change, in the case of the first three, or their re­sults are pub­lished in full in one of the coun­try's dai­ly news­pa­pers, as is the case of RBC Fi­nan­cial;

* The ex­er­cise dealt main­ly with banks that pub­lished their fi­nan­cials for the pe­ri­od 2020 to 2024. We could not ac­cess the RBC Fi­nan­cial re­sults for 2020.

* The ex­er­cise ad­dressed the af­ter-tax prof­its of the banks, which was not al­ways avail­able in the con­sol­i­dat­ed ac­counts of some of the banks, such as ANSA Bank.

Please ad­dress any is­sues with the choice of banks, the da­ta or the treat­ment there­of to an­tho­ny.wil­son@guardian.co.tt