TIDMCIHL
RNS Number : 6169Y
Caribbean Investment Holdings Ltd
22 August 2018
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
CARIBBEAN INVESTMENT HOLDINGS LIMITED ANNOUNCES SIGNIFICANT
IMPROVEMENT IN FINANCIAL RESULTS FOR THE FISCAL YEARED MARCH 31,
2018
Belize City, Belize, August 22, 2018 -- Caribbean Investment
Holdings Limited (London - AIM: CIHL; Bermuda - CIHL) (the
"Company" or "CIHL").
The Company reports that for the financial year ended March 31,
2018 it recorded Net Income of US$20.6 million compared to a Net
Loss of US$2.4 million in fiscal 2017. This significant turnaround
is a direct result of a US$15.3 million reduction in loan loss
provisions at the banking group level, which on consolidation
reflects an improvement in the overall asset quality of the
Company.
In November 2017, the Caribbean Court of Justice, Belize's final
appellate Court, ordered that The Belize Bank Limited ("BBL") was
at liberty to enforce an Award of the London Court of International
Arbitration against the Government of Belize ("GOB") concerning the
recovery of sums due under a 2007 debt owed to BBL. As at March 31,
2018 this judgment debt amounted to US$46.8 million due for
collection from the GOB. The Company's expectation is that this
debt will be fully settled during the course of the next fiscal
year when BBL is expected to be paid in full. The recording of this
judgment debt resulted in a reversal of previously existing
impairment allowances and contributed US$11.0 million to the
Company's net profits.
Commenting on the Company's performance, the Chief Executive
Officer, Mr. Lyndon Guiseppi said:
"The Company has made significant progress on the legal front
during the course of the year and with the major provisioning for
non-performing loans now behind the banking group and an improved
operational efficiency, the group is poised to regain market share
and to expand its product offering. During the course of fiscal
2019, management will also rekindle its interest in identifying
investment opportunities in the financial services sector in the
wider Caribbean, as we seek to develop a regional banking
franchise."
The Company confirms that the annual report and accounts are now
available to view on the Company's website, www.cihltd.co and are
today being posted to shareholders.
For further information contact:
Caribbean Investment Holdings Limited
UK +44 (0)207 248 6700
Belize +501 227 7178
Cenkos Securities plc
Nicholas Wells +44 (0)207 397 8920
Note: This and other press releases are available at the
Company's web site: http://www.cihltd.co.
Background Information
Caribbean Investment Holdings Limited is a parent holding
company with no independent business operations or assets other
than its investments in its subsidiaries, intercompany balances and
holdings of cash and cash equivalents. CIHL's businesses are
conducted through its subsidiaries. The Belize Bank Limited is
incorporated and based in Belize and focuses on the provision of
financial services and lending to domestic clients. Belize Bank
International Limited is incorporated and based in Belize and
focuses on the provision of financial services and lending to
international clients. CIHL also owns an international corporate
services business based in Belize, which operates as Belize
Corporate Services Limited. Within Belize, BBL is a full service
commercial and retail banking operation with a head office in
Belize City and eleven branches extended into each of the six
districts of Belize. The principal operations of BBL are commercial
lending, consumer lending, deposit taking and related banking
activities.
Caribbean Investment Holdings Limited
Financial Information
Consolidated statements of comprehensive income (in US dollars)
2018 2017
Year ended March 31 Notes $m $m
----------------------------------------------------------------- ------ ------------------ ------------------
Financial Services
Interest income 4 39.7 42.0
Interest expense 5 (5.6) (6.8)
----------------------------------------------------------------- ------ ------------------ ------------------
Net interest income 34.1 35.2
Allowance for loan losses 13 (3.9) (19.2)
----------------------------------------------------------------- ------ ------------------ ------------------
Net interest income after allowance for loan losses 30.2 16.0
Non-interest income 6 21.3 11.1
Non-interest expense 7 (20.0) (22.2)
----------------------------------------------------------------- ------ ------------------ ------------------
Operating income - Financial Services 31.5 4.9
----------------------------------------------------------------- ------ ------------------ ------------------
Corporate
Corporate income 1.3 1.0
Corporate expenses (5.0) (4.4)
----------------------------------------------------------------- ------ ------------------ ------------------
Operating loss - Corporate (3.7) (3.4)
----------------------------------------------------------------- ------ ------------------ ------------------
Net income before tax 27.8 1.5
Taxation (7.2) (3.9)
----------------------------------------------------------------- ------ ------------------ ------------------
Net income (loss) after tax and before other comprehensive income 20.6 (2.4)
Other comprehensive income:
Unrealized losses on securities - (0.1)
----------------------------------------------------------------- ------ ------------------ ------------------
Total comprehensive income (loss) 20.6 (2.5)
Earnings (loss) per ordinary share (basic and diluted) 8 $ 0.21 $ (0.02)
----------------------------------------------------------------- ------ ------------------ ------------------
Consolidated balance sheets (in US dollars)
2018 2017
At March 31 Notes $m $m
-------------------------------------------------- ------ ------------------ ------------------
Assets
Financial Services
Cash and cash equivalents 9 12.8 12.0
Balances with the Central Bank of Belize 10 58.8 121.2
Due from banks (net of allowances) 11 52.1 19.0
Investment securities 12 95.1 46.4
Loans to customers (net of allowances) 13 237.8 268.0
Property, plant and equipment 14 20.2 18.6
Due from Government of Belize (net of allowance) 15 46.7 29.8
Other assets 6.2 10.9
Total Financial Services assets 529.7 525.9
-------------------------------------------------- ------ ------------------ ------------------
Corporate
Cash, cash equivalents, and due from banks 0.4 2.6
Other current assets 0.4 0.6
Total assets 530.5 529.1
-------------------------------------------------- ------ ------------------ ------------------
Liabilities and shareholders' equity
Financial Services
Customer accounts 16 435.0 453.5
Interest payable - 3.4
Other liabilities 12.2 8.8
Total Financial Services liabilities 447.2 465.7
-------------------------------------------------- ------ ------------------ ------------------
Corporate
Current liabilities 7.8 8.2
Total liabilities 455.0 473.9
-------------------------------------------------- ------ ------------------ ------------------
Shareholders' equity:
Share capital (ordinary shares of no par value -
2018 (103,264,000) and 2017 (103,642,984) 18 0.5 0.6
Additional paid-in capital 52.8 52.8
Treasury shares 18 (21.7) (21.7)
Retained earnings 43.9 23.5
Total shareholders' equity 75.5 55.2
-------------------------------------------------- ------ ------------------ ------------------
Total liabilities and shareholders' equity 530.5 529.1
-------------------------------------------------- ------ ------------------ ------------------
Consolidated statements of cash flows (in US dollars)
2018 2017
Year ended March 31 $m $m
---------------------------------------------------------------- ------------------ ------------------
Cash flows from operating activities
Net income (loss) from operations 20.6 (2.4)
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation 2.0 1.6
Allowance for loan losses 3.9 19.2
Changes in assets and liabilities:
Decrease in interest payable (3.4) (0.4)
Increase in Government of Belize Receivable (16.9) (4.6)
Decrease in other and current assets 4.9 6.4
Increase in other and current liabilities 3.0 2.1
Net cash provided by operating activities 14.1 21.9
---------------------------------------------------------------- ------------------ ------------------
Cash flows from investing activities
Purchase of property, plant and equipment (net of disposals) (3.6) (3.9)
Increase in investment securities (48.7) (34.6)
Decrease in loans (net of charge-offs) to customers 26.3 1.5
Net cash utilized by investing activities (26.0) (37.0)
---------------------------------------------------------------- ------------------ ------------------
Cash flows from financing activities
Decrease in deposits (18.5) (22.0)
Acquisition of shares (0.1) -
Dividends (0.1) -
Unrealized losses on securities (0.1) (0.1)
Net cash utilized by financing activities (18.8) (22.1)
---------------------------------------------------------------- ------------------ ------------------
Net change in cash, cash equivalents and due from banks (30.7) (37.2)
Cash, cash equivalents and due from banks at beginning of year 154.8 192.0
Cash, cash equivalents and due from banks at end of year 124.1 154.8
---------------------------------------------------------------- ------------------ ------------------
Cash and cash equivalents - financial services 12.8 12.0
Balances with Central Bank of Belize - financial services 58.8 121.2
Due from banks (net of allowances) - financial services 52.1 19.0
Cash, cash equivalents and due from banks - corporate 0.4 2.6
124.1 154.8
---------------------------------------------------------------- ------------------ ------------------
Extracts from Notes to the Financial Statements
Note 4 - Interest income
2018 2017
Year ended March 31 $m $m
--------------------------------------------- ---------------- ----------------
Interest on loans to customers 31.5 34.6
Interest on Government of Belize receivable 6.1 6.1
Interest on securities 2.1 1.3
39.7 42.0
--------------------------------------------- ---------------- ----------------
Note 5 - Interest expense
2018 2017
Year ended March 31 $m $m
------------------------------- ---------------- ----------------
Interest on customer deposits 5.6 6.8
5.6 6.8
------------------------------- ---------------- ----------------
Note 6 - Non-interest income
2018 2017
Year ended March 31 $m $m
-------------------------------------------------------------------- ---------------- -----------------
Foreign exchange income and
commissions 2.9 2.9
Customer service and letter of
credit fees 1.7 1.5
Credit card fees 4.1 4.7
Other financial and related
services 1.3 1.5
Reduction in impairment allowance on due from Government of Belize 11.0 -
Other income 0.3 0.5
21.3 11.1
-------------------------------------------------------------------- ---------------- -----------------
Note 7 - Non-interest expense
2018 2017
Year ended March 31 $m $m
------------------------ ---------------- ----------------
Salaries and benefits 9.4 9.3
Premises and equipment 4.3 3.6
Other expenses 6.3 9.3
20.0 22.2
------------------------ ---------------- ----------------
Note 8 - Earnings per ordinary share
Basic and diluted earnings per ordinary share have been
calculated on the net income attributable to ordinary shareholders
and the weighted average number of ordinary shares in issue (net of
treasury shares) in each year.
2018 2017
Year ended March 31 $m $m
----------------------------------- ---------------------- ------------------------
Net income (loss) 20.6 (2.4)
----------------------------------- ---------------------- ------------------------
Weighted average number of
shares (basic and diluted) 99,520,017 99,899,001
----------------------------------- ---------------------- ------------------------
Basic and diluted earnings (loss)
per ordinary share $ 0.21 $ (0.02)
----------------------------------- ---------------------- ------------------------
During the year ended March 31, 2018 and 2017 the weighted
average effect of share options has been excluded from the
calculation of diluted earnings per ordinary share, since they were
anti-dilutive under the treasury stock method of earnings per share
calculation (note 20).
Note 9 - Cash and cash equivalents
2018 2017
At March 31 $m $m
------------------------------------- -------------------- --------------------
Cash in hand 9.4 9.6
Amounts in the course of collection 3.4 2.4
12.8 12.0
------------------------------------- -------------------- --------------------
Currency, liquidity, and interest rates risks analyses of cash
and cash equivalents are disclosed in Note 23.
Note 10 - Balances with the Central Bank of Belize
2018 2017
At March 31 $m $m
---------------------------- ------------------- -------------------
Statutory reserve balances 34.2 34.6
Operating balance 24.6 86.6
58.8 121.2
---------------------------- ------------------- -------------------
BBL is required to maintain an average minimum non-interest
bearing deposit balance with the Central Bank of Belize equal to
8.5 percent of the average deposit liabilities of BBL. At March 31,
2018, the actual amount was 13.5 percent. In addition, BBL must
maintain an average aggregate of approved liquid assets (which
include the average minimum non-interest bearing deposit balance
maintained with the Central Bank of Belize) equal to 23 percent of
the average deposit liabilities of BBL. At March 31, 2018, the
actual amount was 28.9 percent. The statutory reserve balances are
not readily available to finance the day to day operations of the
banks.
Note 11 - Due from banks (net of allowances)
2018 2017
At March 31 $m $m
----------------------------------- -------------------- --------------------
Due from banks 52.3 19.3
Less: impairment allowance on due
from banks (0.2) (0.3)
-------------------- --------------------
52.1 19.0
----------------------------------- -------------------- --------------------
The portfolio of balances held by both BBL and BBIL represents
instruments of short-term placements of temporary available
cash.
As at March 31, 2018 and 2017, all the interbank loans and
deposits placed in other banks were current and not impaired except
for balances held with Worldclear Limited, amounting to $0.2
million, which had a related impairment allowance of $0.2
million.
Movements in impairment allowance on due from banks were as
follows:
2018 2017
At March 31 $m $m
------------------------------------ -------------------- ---------------------
At the beginning of the year (0.3) -
Charge during the year - (0.3)
Balances recovered during the year 0.1 -
-------------------- ---------------------
(0.2) (0.3)
------------------------------------ -------------------- ---------------------
Currency, liquidity, and interest rate risk analyses of cash and
cash equivalents are disclosed in Note 23.
BBL has utilized $4.2 million (2017 - $4.2 million) of its
balances held with other financial institutions to be held as
collateral for certain credit lines. These particular financial
assets are pledged as collateral under terms that are usual and
customary for such transactions.
Note 12 - Investment securities
2018 2017
At March 31 $m $m
------------------------------- --------------- -----------------
Securities available for sale 14.4 8.9
Securities held to maturity 80.7 37.5
95.1 46.4
------------------------------- --------------- -----------------
The fair value of available for sale securities and the related
gross unrealized gains and losses recognized in accumulated other
comprehensive income were as follows:
Gross Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
At March 31, 2018 $m $m $m $m
------------------------ ---------------- ------------------ ------------------ -------------
Government sponsored
entities and agencies 0.3 - - 0.3
Corporate bonds 14.1 - (0.1) 14.0
14.4 - (0.1) 14.3
------------------------ ---------------- ------------------ ------------------ -------------
Gross Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
At March 31, 2017 $m $m $m $m
------------------------ ---------------- ------------------ ------------------ -------------
Government sponsored
entities and agencies 3.4 - (0.1) 3.3
Corporate bonds 5.6 - - 5.6
9.0 - (0.1) 8.9
------------------------ ---------------- ------------------ ------------------ -------------
A summary of securities as of March 31, 2018, by contractual
maturity, is presented below. Actual maturities may differ from
contractual maturities because issuers may have the right to call
or prepay obligations with or without call or prepayment
penalties.
2018 2017
At March 31 $m $m
---------------------------- ---------------- -----------------
Due in one year or less 56.9 30.2
Due in one to five years 29.6 11.9
Due from five to ten years 7.4 2.8
Due after ten years 1.2 1.5
95.1 46.4
---------------------------- ---------------- -----------------
Management has the positive intent and ability to hold the
securities classified as held to maturity to their respective
maturities, so they are carried at amortized cost which
approximates market value.
Management evaluates securities for other-than-temporary
impairment at least on a quarterly basis, and more frequently when
economic or market conditions warrant such an evaluation.
Note 13 - Loans to customers (net of allowances)
2018 2017
At March 31 $m $m
------------------------------------- ---------------- --------------
Loans (net of unearned income):
Residential mortgage 43.4 41.8
Credit card 9.3 9.0
Other consumer 50.5 45.2
Commercial - real estate 50.5 58.4
Commercial - other 104.2 145.1
257.9 299.5
------------------------------------- ---------------- --------------
Allowance for loan losses:
Residential mortgage (3.9) (3.5)
Credit card (0.3) (0.3)
Other consumer (1.9) (1.5)
Commercial - real estate (2.4) (8.4)
Commercial - other (11.6) (17.8)
(20.1) (31.5)
------------------------------------- ---------------- --------------
Loans (net of unearned income
and allowance for loan losses):
Residential mortgage 39.5 38.3
Credit card 9.0 8.7
Other consumer 48.6 43.7
Commercial - real estate 48.1 50.0
Commercial - other 92.6 127.3
------------------------------------- ---------------- --------------
Loans (net of unearned income
and allowance for loan losses): 237.8 268.0
------------------------------------- ---------------- --------------
The maturity range of loans outstanding is shown in the table
below. All loans, other than consumer loans, are legally repayable
on demand; however, they are disclosed below as if they run to
their full maturity.
Due after one
Due in one year through Due after
year or less five years five years Total
At March 31, 2018 $m $m $m $m
---------------------- ------------------ --------------------- --------------- ---------
Residential mortgage 0.2 6.2 37.0 43.4
Credit card 9.2 0.1 - 9.3
Other consumer 6.8 35.9 7.8 50.5
Commercial - real
estate 3.6 17.1 29.8 50.5
Commercial - other 26.7 17.3 60.2 104.2
46.5 76.6 134.8 257.9
---------------------- ------------------ --------------------- --------------- ---------
Due after one
Due in one year through Due after
year or less five years five years Total
At March 31, 2017 $m $m $m $m
---------------------- ------------------ --------------------- --------------- ---------
Residential mortgage 0.3 6.0 35.5 41.8
Credit card 8.8 0.1 0.1 9.0
Other consumer 6.6 32.6 6.0 45.2
Commercial - real
estate 5.1 19.8 33.5 58.4
Commercial - other 34.4 18.6 92.1 145.1
55.2 77.1 167.2 299.5
---------------------- ------------------ --------------------- --------------- ---------
The table below reflects outstanding loans by industry
classifications.
2018 2017
At March 31 Amount % Amount %
--------------------------- ---------------- ------- ---------------- -------
Real estate 69.5 26.9% 78.6 26.2%
Other consumer loans 50.5 19.6% 45.2 15.1%
Building and construction 32.9 12.8% 36.2 12.1%
Distribution 20.1 7.8% 23.3 7.8%
Agriculture 19.5 7.6% 48.6 16.2%
Transportation 15.2 5.9% 15.7 5.2%
Tourism 14.8 5.7% 16.7 5.6%
Marine Products 11.2 4.3% 12.6 4.2%
Credit card 9.3 3.6% 9.0 3.0%
Professional services 6.7 2.6% 4.3 1.4%
Utilities 5.5 2.1% 5.2 1.7%
Manufacturing 1.9 0.7% 1.5 0.5%
Government 0.5 0.2% 1.2 0.4%
Entertainment 0.2 0.1% 0.2 0.1%
Mining and exploration 0.1 0.0% 0.8 0.3%
Forestry - 0.0% 0.3 0.1%
Financial institutions - 0.0% 0.1 0.0%
Total loans 257.9 100.0% 299.5 100.0%
--------------------------- ---------------- ------- ---------------- -------
The Group categorizes loans into risk categories based on
relevant information about the ability of borrowers to service
their debt such as: current financial information, historical
payment experience, credit documentation, public information, and
current economic trends, among other factors. The Group analyses
loans individually by classifying the loans as to credit risk. This
analysis is performed on a monthly basis. The Group uses the
following definitions for risk ratings:
Special Mention: Loans classified as special mention have a
potential weakness that deserves management's close attention. If
left uncorrected, these potential weaknesses may result in
deterioration of the repayment prospects for the loan or of the
institution's credit position at some future date.
Substandard: Loans classified as substandard are those loans
that are over three and up to six months in arrears or overdraft
accounts where interest charges have not been covered by deposits
for three to less than six months.
Doubtful: Loans classified as doubtful are those loans that are
over six and up to twelve months in arrears or overdraft accounts
where interest charges have not been covered by deposits for six to
less than twelve months.
Loss: Loans classified as loss are those loans that are over
twelve months in arrears or overdraft accounts where interest
charges have not been covered by deposits for twelve months or
more.
Loans not meeting the criteria above that are analysed
individually as part of the above described process are considered
to be Pass loans.
Based on the most recent analysis performed, the risk category
of loans by class of loans is as follows:
Sub -
Pass Standard Doubtful Loss Total
At March 31, 2018 $m $m $m $m $m
-------------------------- ------------- -------------- ------------- -------------- -------------
Residential mortgage 37.5 - 1.8 4.1 43.4
Credit card 9.1 0.1 0.1 - 9.3
Other consumer 48.7 0.4 0.6 0.8 50.5
Commercial - real estate 45.9 2.6 0.1 1.9 50.5
Commercial - other 92.2 1.4 0.6 10.0 104.2
233.4 4.5 3.2 16.8 257.9
-------------------------- ------------- -------------- ------------- -------------- -------------
Sub -
Pass Standard Doubtful Loss Total
At March 31, 2017 $m $m $m $m $m
-------------------------- ------------- -------------- ------------- ------------- -------------
Residential mortgage 36.8 0.4 0.1 4.5 41.8
Credit card 8.7 0.1 0.1 0.1 9.0
Other consumer 43.5 0.6 0.2 0.9 45.2
Commercial - real estate 51.8 - 0.8 5.8 58.4
Commercial - other 128.2 9.4 1.6 5.9 145.1
269.0 10.5 2.8 17.2 299.5
-------------------------- ------------- -------------- ------------- ------------- -------------
Individually impaired loans with allocated allowances were as
follows:
2018 2017
At March 31 $m $m
---------------------------------- ------------------ ---------------------
Non-accrual loans as at year end 24.5 30.3
Other performing loans classified
as impaired - 29.6
Less: impairment allowance on
loans to customers (20.1) (31.5)
At the end of the year 4.4 28.4
---------------------------------- ------------------ ---------------------
The Group considers all non-accrual loans as individually
classified impaired loans.
The following table presents the recorded investment in
non-accrual by class of loans:
2018 2017
At March 31 $m $m
-------------------------- ------------------ ---------------------
Residential mortgage 5.9 4.9
Credit card 0.2 0.3
Other consumer 1.8 1.7
Commercial - real estate 4.6 6.6
Commercial - other 12.0 16.8
24.5 30.3
-------------------------- ------------------ ---------------------
The interest income which would have been recorded during the
year ended March 31, 2018 had all non-accrual loans been current in
accordance with their terms was approximately $5.9 million (2017 -
$16.7 million).
All non-accrual loans are considered as individually impaired
loans.
As a result of the nature of these financial instruments, the
estimated fair market value of the loan portfolio is considered by
the Group to approximate its carrying value. Loan loss provisioning
is based on management's estimate of the recoverability of
non-performing loans after allowing for the estimated net
realizable value of collateral held.
At March 31, 2018, the Group had total loans outstanding to
certain officers and employees of $9.7 million (2017 - $8.8
million) at preferential rates of interest varying between 0.0
percent and 12.0 percent per annum, repayable over varying periods
not exceeding 25 years. At March 31, 2018, these loans included nil
(2017 - nil) classified within commercial - other loans. The
transfer value loss on these loans had not been considered material
and therefore had not been included in these financial
statements.
Changes in the allowance for loan losses were as follows:
2018 2017
Year ended March 31 $m $m
------------------------------ ---------------- -------------
At the beginning of year 31.5 52.9
Impairment allowance charged
during the year 3.9 19.2
Charge-offs (15.3) (40.6)
------------------------------ ---------------- -------------
Net movement in the year (11.4) (21.4)
------------------------------ ---------------- -------------
At end of the year 20.1 31.5
------------------------------ ---------------- -------------
Note 14 - Property, plant and equipment
2018 2017
At March 31 $m $m
------------------------------- -------------------- --------------------
Cost:
Land 1.5 1.2
Buildings 15.7 15.3
Furniture and fixtures and
other equipment 6.8 6.0
Computer and office equipment 9.4 8.4
Motor vehicles 2.1 2.2
------------------------------- -------------------- --------------------
Total cost 35.5 33.1
Less: total accumulated
depreciation (15.3) (14.5)
20.2 18.6
------------------------------- -------------------- --------------------
Total capital expenditures for the year ended March 31, 2018 was
$3.6 million (2017 - $4.3 million). Total depreciation expense for
the year ended March 31, 2018 was $2.0 million (2017 - $1.6
million).
For the purpose of impairment testing for the year ended March
31, 2018, the Group's management has combined all the subsidiaries
into one reporting unit. As a result no impairment was determined
as at March 31, 2018.
As at March 31, 2018 the Group's buildings, vehicles, ATMs and
other equipment were insured for $22.6 million. (2017 - $23.9
million)
As at March 31, 2018 historical cost of fully depreciated fixed
assets amounted to $6.9 million (2017 - $6.2 million). They are
recognized in the consolidated balance sheets at zero residual
value.
Note 15 - Due from Government of Belize (net of allowance)
2018 2017
At March 31 $m $m
----------------------------- -------------------- -------------------
Amounts receivable from GOB
arbitration award 46.8 40.8
Less: Impairment allowance (0.1) (11.0)
46.7 29.8
----------------------------- -------------------- -------------------
Movements in impairment allowance on due from Government of
Belize.
2018 2017
At March 31 $m $m
--------------------------- -------------------- --------------------
At beginning of the year (11.0) (19.8)
Charge during the year (0.1) (1.6)
Reduction during the year 11.0 10.4
At the end of the year (0.1) (11.0)
--------------------------- -------------------- --------------------
On 23 March 2007, a loan note was issued to the BBL by the GOB
under the terms of a settlement deed entered into by BBL and the
GOB on the same date (the "2007 Loan Note"). The 2007 Loan Note had
been entered into by the GOB in order to satisfy the GOB's
liability under a 2004 guarantee for debts and liabilities owed to
BBL by Universal Health Services.
While BBL had initially recorded the receivable owed by the GOB
under the 2007 Loan Note, the Central Bank of Belize directed BBL
to remove this receivable from BBL's accounts; this exclusion
resulted in the auditor issuing a qualified opinion on BBL's
financial statements for the fiscal year ended 31 March, 2012.
BBL also commenced arbitration proceedings (the "Arbitration")
under the London Court of International Arbitration (the "LCIA") in
order to recover the sums due under the 2007 Loan Note. On 15
January 2013 the arbitral tribunal made its Final Award in the
Arbitration in favour of BBL. It declared that the 2007 Loan Note
was valid and binding and ordered the GOB to pay BBL the sum of BZD
36,895,509 plus interest and costs.
The LCIA Final Award confirmed that the 2007 Loan Note was valid
and binding on the basis of a judgement given by the Privy Council,
which was at that time Belize's highest court of appeal, in The
Belize Bank Limited v The Association of Concerned Belizeans and
Others. In this judgement, the Privy Council rejected a challenge
to the Loan Note that it did not comply with the Belize Finance and
Audit (Reform) Act.
In order to increase its enforcement options, BBL applied to the
English High Court for an order that the Final Award be enforceable
in the same manner as a judgement or order of an English Court to
the same effect. That order was granted on 20 February 2013 and it
was served on the GOB on 15 May 2013 (the "English Judgement").
Award Enforcement proceedings were also commenced against GOB in
the Belize Supreme Court in 2013. On 17 February 2015, the Belize
Supreme Court refused to enforce the Final Award on the grounds
that enforcement would be contrary to public policy. BBL appealed
this decision to the Belize Court of Appeal and on 24 March 2017,
the Court of Appeal upheld the decision of the Belize Supreme
Court.
BBL appealed the Court of Appeal's decision to the Caribbean
Court of Justice (the "CCJ") and on 22 November 2017, the CCJ
reversed the Court of Appeal's decision and found in favour of BBL.
The CCJ's Order granted permission to BBL to enforce the LCIA Award
in the same manner as a judgement or order of the Supreme Court to
the same effect (the "Belize Judgement"). Twenty-one days after the
CCJ granted permission, BBL applied to the CCJ under section 25 of
the Crown Proceedings Act for a certificate certifying the amounts
payable to BBL by the Government. On 3 January 2018 the CCJ issued
the Certificate certifying the amount payable to BBL by the
Government under the LCIA Award and the Certificate was served on
the Attorney General, the Minister of Finance and the Financial
Secretary on 4 January 2018. The CCJ held that the effect of the
Certificate is to convert the CCJ Order into a Judgement Debt.
On 4 January 2018 BBL applied for a further order from the CCJ
directing the Minister of Finance to pay the amount due under the
Judgement. On 1 June 2018 the CCJ decided that BBL's application
was premature but stated in its decision that if the Government
failed to enact the necessary legislation to satisfy the judgement,
then BBL should apply to the Belize Supreme Court for a declaration
that the Minister of Finance has failed to comply with his
obligations under section 25 of the Crown Proceedings Act and an
order that the Minister of Finance pay the amount due under the
judgement.
On 26 June 2018, BBL filed an application pursuant to Part 56 of
the Supreme Court (Civil Procedure) Rules, 2005 for an order
granting permission to BBL to apply for Judicial Review of: (i) the
decision of the Minister of Finance not to comply with his
mandatory duty within section 25(3) of the Crown Proceedings Act to
pay the sum certified as payable to BBL by the Certificate of Order
dated 3 January 2018 issued by the Registrar of the Caribbean Court
of Justice, and (ii) the decision of the Minister of Finance not to
satisfy the Judgement Debt with interest accruing at the rate of 6%
per annum.
On 9 July 2018 the Chief Justice granted permission to BBL to
apply for judicial review. BBL filed a fixed date claim form
applying for judicial review on 23 July 2018. The first hearing
will take place on 17 September 2018.
In order to further increase its enforcement options, BBL filed
a petition to enforce the Final Award in federal court in the
United States on 18 April 2014. The GOB filed a motion to dismiss
and a response to the petition to confirm the Final Award on 8
August 2014. The GOB applied for a stay pending the outcome of
similar litigation. However, the stay was denied on 9 January 2016.
On 8 June 2016 the US District Court confirmed the Final Award and
entered judgement in favour of BBL against the GOB for the monetary
portion of the Award; to be converted to US dollars, applying the
conversion rate as of the date the Award was issued plus interest
at the annual rate of 17.0% compounded annually between 8 September
2012 and 8 June 2016. On 12 July 2016, the United States District
Court ordered that judgement be entered in favour of BBL against
the GOB in the amount of USD 19,086,210 plus USD 16,099,216 in
pre-judgement interest, totalling USD 35,185,427 (the "US
Judgement").
The GOB appealed the decision of the US District Court to the US
Court of Appeals, D.C. Circuit. A hearing in the US Court of
Appeals took place on 9 February 2017. On 31 March 2017, the US
Court of Appeals, D.C. Circuit upheld the decision of the US
District Court and rejected all of the GOB's arguments on
appeal.
On 28 April 2017, the GOB filed a petition for an 'en banc'
review of the US Court of Appeal's decision in essence asking the
court to reconsider its decision. On 7 June 2017, the petition by
the GOB for an 'en banc' rehearing was denied by the US Court of
Appeal and its earlier judgement was confirmed.
The GOB then sought review by the United States Supreme Court.
On 13 November 2017, the United States Supreme Court denied the
GOB's petition for certiorari, rendering the US Judgement final and
not subject to further judicial review.
On 16 November 2017 BBL filed a motion in the United States
District Court for the District of Columbia pursuant to 28 U.S.C.
--1610(c) seeking judicial authorisation to seek enforcement of the
US Judgement against the GOB. On March 12, 2018, the United States
District Court ordered that the Bank may now seek attachment or
execution of Government of Belize property to satisfy the Court's
judgement pursuant to 28 U.S.C. -- 1610(a)-(b) in the jurisdictions
where such attachment or execution is appropriate.
The Award underlying the English Judgement, the US Judgement,
and the Belize Judgement has been recognised and declared
enforceable against GOB by the highest Belize and US Courts, and by
the English Courts.
Note 16 - Customer accounts
2018 2017
At March 31 $m $m
------------------ ------------- --------------
Term deposits 192.9 214.0
Demand deposits 163.1 166.2
Savings deposits 79.0 73.3
435.0 453.5
------------------ ------------- --------------
The maturity distribution of certificates of deposit of $0.1
million or more was as follows:
2018 2017
At March 31 $m $m
--------------------------------- ------------- --------------
3 months or less 32.3 38.7
Over 3 and to 6 months 29.6 38.7
Over 6 and to 12 months 69.8 80.3
Over 12 months 23.0 17.2
Deposits less than $0.1 million 38.2 39.1
192.9 214.0
--------------------------------- ------------- --------------
Included in certificates of deposit at March 31, 2018 were $8.7
million (2017 - $12.7 million) of certificates of deposit
denominated in US dollars and nil (2017 - nil) denominated in UK
pounds sterling. Included in demand deposits at March 31, 2018 were
$18.8 million (2017 - $20.6 million) of demand deposits denominated
in US dollars and $0.2 million (2017 - $0.2 million) denominated in
UK pounds sterling.
As a result of the short-term maturity of these financial
instruments, their carrying value is considered by the Group to
approximately equal their fair market value.
Note 18 - Share capital
2018 2017
At March 31 $m $m
------------------------------------ --------------------- -----------------
Authorized
Ordinary shares:
200,000,000 shares of no
par value 2.0 2.0
Preference shares:
14,000,000 shares of $1.00 each 14.0 14.0
Total authorized 16.0 16.0
-------------------------------------- --------------------- -----------------
Issued and outstanding
Ordinary shares:
103,264,000 shares of no
par value (2017 - 103,642,984) 0.5 0.6
-------------------------------------- --------------------- -----------------
During the year ended March 31, 2018, the Company acquired
378,984 ordinary shares In the Company at a price of 11.50 pence
per share. Immediately following the acquisition of the shares, the
378,984 shares were cancelled.
Treasury Shares
During the two years ended March 31, 2018 and 2017, there has
been no movement in treasury shares.
Number $m
------------------- ---------------- ----------------
At March 31, 2017 3,743,983 21.7
--------------------- ---------------- ----------------
At March 31, 2018 3,743,983 21.7
--------------------- ---------------- ----------------
Share Options
Caribbean Investment has granted employee share options which
are issued under its share option plan which reserves ordinary
shares for issuance to the Company's executives, officers and key
employees. The options have been granted under the Long-Term
Incentive Plans (the "Incentive Plans"). The Incentive Plans are
administrated by a committee of the board of directors of Caribbean
Investment. Options are generally granted to purchase Caribbean
Investment ordinary shares at prices which equate to or are above
the market price of the ordinary shares on the date the option is
granted. Conditions of vesting are determined at the time of grant
but options are generally vested and become exercisable for a
period of between three and ten years from the date of grant and
all have a maximum term of ten years.
Weighted
Number average
of share exercise
options price
------------------------------- ---------------- ---------
Outstanding at March 31, 2017 7,250,000 $1.95
--------------------------------- ---------------- ---------
Outstanding at March 31, 2018 7,250,000 $1.95
--------------------------------- ---------------- ---------
During the year ended March 31, 2018, no outstanding options
were exercised.
In August 2008, Caribbean Investment granted options over
7,000,000 ordinary shares at an exercise price of $6.50 per share
which vest and are exercisable in three equal instalments on August
1, 2012, August 1, 2013 and August 1, 2014.
The term of these options extend to August 1, 2019.
In May 2009, Caribbean Investment granted options over a further
250,000 ordinary shares at the exercise price of $6.50 per share
which vest and are exercisable in three instalments on June 1,
2013, June 1, 2014 and June 1, 2015. The term of these options
extend to June 1, 2020.
The exercise price of these options was adjusted to $1.95
following the demerger of Waterloo Investment Holdings Limited from
the Group in 2011.
The Group measures compensation cost in connection with share
option plans and schemes using a fair value based method. Using the
fair value based method, the Group took a charge of nil in the
consolidated statement of comprehensive income during the year
ended March 31, 2018 (2017 - nil).
The fair value of each option grant in 2008 was estimated on the
date of grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:
Expected stock price volatility 30 percent
Risk free interest rate 3.7 percent
Expected dividend yield Nil percent
Expected life of option 7.0 years
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEEFMEFASEFA
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