FirstCaribbean International Bank (Bahamas) Limited
FirstCaribbean International Bank (Bahamas) Limited FirstCaribbean International Bank (Bahamas) Limited
Notes to Consolidated Financial StatementsFor the year ended October 31, 2009(Expressed in thousands of Bahamian dollars)16. Share Capital and Reserves (Continued)2009 2008Share capital (Note 15) $ 477,230 $ 477,230ReservesStatutory reserve fund – Turks and CaicosIslands 23,113 18,085Statutory loan loss reserve – Bahamas 13,663 15,287Revaluation reserve – Available-for-sale securities (8,381) (33,189)Reverse acquisition reserve (63,566) (63,566)Total reserves (35,171) (63,383)Total share capital and reserves $ 442,059 $ 413,847Under the Banking (Amendment) Ordinance 2002 of the Turks and Caicos Islands (TCI), the Bank was required in 2004 toassign capital to the TCI operations in the amount of $24 million.The movements in reserves were as follows:2009 2008Statutory reserve fund– Turks and Caicos IslandsBalance, beginning of year $ 18,085 $ 12,000Transfers from retained earnings 5,028 6,085Balance, end of year $ 23,113 $ 18,085In accordance with the Banking (Amendment) Ordinance 2002 of the TCI and the regulations of the Financial ServicesCommission of the Turks and Caicos Islands, the Bank is required to maintain a statutory reserve fund of not less than theamount of its assigned capital. Where it is less than the assigned capital, the Bank is required to annually transfer 25% ofits net profit earned from its TCI operations to this fund. The Bank’s practice is to make this transfer based on net profitsof the preceding fiscal year. During the year the Bank transferred $5,028 (2008: $6,085) from retained earnings to thestatutory reserve fund.Revaluation reserve – available-for-salesecurities2009 2008Balance, beginning of year $ (33,189) $ (5,862)Net gain (loss) from changes in fair value ofavailable-for-sale securities (Note 8) 24,808 (27,327)Balance, end of year $ (8,381) $ (33,189)46
Notes to Consolidated Financial StatementsFor the year ended October 31, 2009(Expressed in thousands of Bahamian dollars)16. Share Capital and Reserves (Continued)Regulatory capital (continued)Statutory loan loss reserve – Bahamas2009 2008Balance, beginning of year $ 15,287 $ 16,495Transfers to retained earnings (1,624) (1,208)Balance, end of year $ 13,663 $ 15,287Banking Regulations of The Central Bank of The Bahamas require a general provision in respect of the performing loans ofat least one percent of these loans. To the extent the inherent risk provision for loans and advances to customers is less thanthis amount, a statutory loan loss reserve has been established and the required additional amount has been appropriatedfrom retained earnings, in accordance with IFRS.Reverse acquisition reserve2009 2008Reverse acquisition reserve, beginning and end of year $ (63,566) $ (63,566)Under the combination on October 11, 2002, CIBC West Indies became the legal parent company with Barclays transferringits operations to subsidiaries of CIBC West Indies in exchange, ultimately, for common shares and newly created classes ofnon-voting and preference shares of CIBC West Indies. Barclays was identified as the acquirer as the fair value of its businessprior to the combination was significantly greater than the fair value of CIBC West Indies’ business and as a result Barclayshad the greater economic interest. This situation is described by IFRS as a reverse acquisition.In accordance with IFRS, the equity of the combined Bank at October 11, 2002 comprised the equity of the Barclaysbranches and subsidiaries ($211,295), together with the fair value of the CIBC Bahamas business ($408,261), for a total of$196,966. However, the legal share capital and premium of the Bank comprises the issued share capital and premium ofCIBC Bahamas plus the shares issued to effect the combination recorded at fair value for a total of $472,828 at October 11,2002.The reverse acquisition reserve represents the difference at October 11, 2002 between the required share capital andpremium of the Bank ($472,828) together with the retained earnings of the Barclays Branches and Subsidiaries ($1,001)and the equity of the Bank presented in accordance with IFRS ($408,261).17. Net Interest Income2009 2008Interest and similar incomeCash and short-term funds $ 2,962 $ 13,129Financial assets at fair value through profit or loss 3,342 19,363Investment securities 40,502 42,410Loans and advances 170,212 188,699Reverse repos and other – 4217,018 263,605Interest and similar expenseBanks and customers 65,764 104,446Other borrowed funds 8,361 3,58274,125 108,028Net interest income $ 142,893 $ 155,57747
- Page 5 and 6: Executive ChairmanMichael K. Mansoo
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Notes to Consolidated Financial StatementsFor the year ended October 31, 2009(Expressed in thousands of Bahamian dollars)16. Share Capital and Reserves (Continued)2009 2008Share capital (Note 15) $ 477,230 $ 477,230ReservesStatutory reserve fund – Turks and CaicosIslands 23,113 18,085Statutory loan loss reserve – <strong>Bahamas</strong> 13,663 15,287Revaluation reserve – Available-for-sale securities (8,381) (33,189)Reverse acquisition reserve (63,566) (63,566)Total reserves (35,171) (63,383)Total share capital and reserves $ 442,059 $ 413,847Under the <strong>Bank</strong>ing (Amendment) Ordinance 2002 of the Turks and Caicos Islands (TCI), the <strong>Bank</strong> was required in 2004 toassign capital to the TCI operations in the amount of $24 million.The movements in reserves were as follows:2009 2008Statutory reserve fund– Turks and Caicos IslandsBalance, beginning of year $ 18,085 $ 12,000Transfers from retained earnings 5,028 6,085Balance, end of year $ 23,113 $ 18,085In accordance with the <strong>Bank</strong>ing (Amendment) Ordinance 2002 of the TCI and the regulations of the Financial ServicesCommission of the Turks and Caicos Islands, the <strong>Bank</strong> is required to maintain a statutory reserve fund of not less than theamount of its assigned capital. Where it is less than the assigned capital, the <strong>Bank</strong> is required to annually transfer 25% ofits net profit earned from its TCI operations to this fund. The <strong>Bank</strong>’s practice is to make this transfer based on net profitsof the preceding fiscal year. During the year the <strong>Bank</strong> transferred $5,028 (2008: $6,085) from retained earnings to thestatutory reserve fund.Revaluation reserve – available-for-salesecurities2009 2008Balance, beginning of year $ (33,189) $ (5,862)Net gain (loss) from changes in fair value ofavailable-for-sale securities (Note 8) 24,808 (27,327)Balance, end of year $ (8,381) $ (33,189)46
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