Bahamas - FirstCaribbean International Bank
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Bahamas - FirstCaribbean International Bank

Bahamas - FirstCaribbean International Bank Bahamas - FirstCaribbean International Bank

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FIRSTCARIBBEAN INTERNATIONAL BANK (BAHAMAS) LIMITEDNotes to Consolidated Financial StatementsOctober 31, 2002(expressed in thousands of Bahamian dollars)25 Use of financial instruments…continuedELiquidity risk…continuedThe matching and controlled mismatching of the maturities and interest rates of assets and liabilities isfundamental to the management of the Bank. It is unusual for banks ever to be completely matchedsince business transacted is often of uncertain term and different types. An unmatched positionpotentially enhances profitability, but also increases the risk of losses.The maturities of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearingliabilities as they mature, are important factors in assessing the liquidity of the Bank and its exposure tochanges in interest rates and exchange rates.Liquidity requirements to support calls under guarantees and standby letters of credit are considerablyless than the amount of the commitment because the Bank does not generally expect the third party todraw funds under the agreement. The total outstanding contractual amount of commitments to extendcredit does not necessarily represent future cash requirements, since many of these commitments willexpire or terminate without being funded.FFair values of financial assets and liabilitiesDue from other banksDue from other banks includes inter-bank placements and items in the course of collection.The fair value of floating rate placements and overnight deposits is their carrying amount. The estimatedfair value of fixed interest bearing deposits is based on discounted cash flows using prevailing moneymarket interest rates for debts with similar credit risk and remaining maturity.Loans and advances to customersLoans and advances are net of specific and other provisions for impairment. The estimated fair value ofloans and advances represents the discounted amount of estimated future cash flows expected to bereceived. Expected cash flows are discounted at current market rates to determine fair value.81

FIRSTCARIBBEAN INTERNATIONAL BANK (BAHAMAS) LIMITEDNotes to Consolidated Financial StatementsOctober 31, 2002(expressed in thousands of Bahamian dollars)25 Use of financial instruments…continuedInvestment securitiesInvestment securities include only interest-bearing assets held to maturity, as assets available-for-sale are nowmeasured at fair value. Fair value for held to maturity assets is based on market prices or broker/dealer pricequotations. Where this information is not available, fair value has been estimated using quoted prices forsecurities with similar credit, maturity and yield characteristics, or in some cases by reference to the nettangible asset backing of the investee.Deposits and borrowingsThe estimated fair value of deposits with no stated maturity, which includes non-interest-bearing deposits, isthe amount repayable on demand.The estimated fair value of fixed interest bearing deposits and other borrowings without quoted market priceis based on discounted cash flows using interest rates for new debts with similar remaining maturity.26 Principal subsidiary undertakingsNameFirstCaribbean International Finance Corporation (Bahamas) LimitedFirstCaribbean International (Bahamas) Nominees Company LimitedFirstCaribbean International Land Holdings (TCI) LimitedCountry of incorporationBahamasBahamasTurks & Caicos IslandsAll subsidiaries are wholly ownedBranches of Barclays Bank PLC included in the December 31, 2001 combined financial statements are:• Bahamas• Turks & CaicosThe significant entity included in the combined financial statements is Barclays Finance Corporation(Bahamas) Limited.82

FIRSTCARIBBEAN INTERNATIONAL BANK (BAHAMAS) LIMITEDNotes to Consolidated Financial StatementsOctober 31, 2002(expressed in thousands of Bahamian dollars)25 Use of financial instruments…continuedInvestment securitiesInvestment securities include only interest-bearing assets held to maturity, as assets available-for-sale are nowmeasured at fair value. Fair value for held to maturity assets is based on market prices or broker/dealer pricequotations. Where this information is not available, fair value has been estimated using quoted prices forsecurities with similar credit, maturity and yield characteristics, or in some cases by reference to the nettangible asset backing of the investee.Deposits and borrowingsThe estimated fair value of deposits with no stated maturity, which includes non-interest-bearing deposits, isthe amount repayable on demand.The estimated fair value of fixed interest bearing deposits and other borrowings without quoted market priceis based on discounted cash flows using interest rates for new debts with similar remaining maturity.26 Principal subsidiary undertakingsName<strong>FirstCaribbean</strong> <strong>International</strong> Finance Corporation (<strong>Bahamas</strong>) Limited<strong>FirstCaribbean</strong> <strong>International</strong> (<strong>Bahamas</strong>) Nominees Company Limited<strong>FirstCaribbean</strong> <strong>International</strong> Land Holdings (TCI) LimitedCountry of incorporation<strong>Bahamas</strong><strong>Bahamas</strong>Turks & Caicos IslandsAll subsidiaries are wholly ownedBranches of Barclays <strong>Bank</strong> PLC included in the December 31, 2001 combined financial statements are:• <strong>Bahamas</strong>• Turks & CaicosThe significant entity included in the combined financial statements is Barclays Finance Corporation(<strong>Bahamas</strong>) Limited.82

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