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FCIB may be delisted from JSE - But will stay in Jamaica

Published:Friday | February 7, 2014 | 12:00 AM
Parkhill

 

Avia Collinder, Business Reporter

FirstCaribbean International Bank (FCB) Limited, the regional group owned by CIBC of Canada, said that it is likely to be delisted from the Jamaica Stock Exchange (JSE) in the near future.

The decision, it said, is linked to the assessment of the company as being in breach of JSE rule 402 relating to holdings of ordinary shares, of which they were notified in October 2013.

"The Jamaica Stock Exchange notified the bank that it did not meet the minimum listing requirement, i.e. the percentage of shares held other than by the bank's majority shareholder was less than 20 per cent, and the average total traded volume for the 36 months before we received the correspondence from the JSE was below two per cent," the bank said in response to queries from the Financial Gleaner on Wednesday.

In response to questions sent to the bank, Chief Executive Officer of CIBC FirstCaribbean, Rik Parkhill, said "it is important to point out that we did not decide that we no longer wish to maintain our listing on the JSE."

Having reviewed the situation, the bank said it invited the JSE to let matters take its course.

"We have carefully reviewed the matter and have determined that there is unlikely to be a change in the foreseeable future, so we have decided that we will accept that the bank will be delisted by the JSE," Parkhill said.

"The bank has therefore invited the board of the JSE to exercise its discretion to delist the bank at its February meeting," he added.

FCIB stock, which is now trading at J$88 per unit, lost 2.2 per cent of its value between January and December 2013. No trading has occurred since the start of 2014.

The bank has just over 1.52 billion units listed on the JSE with current market value of J$134.21 billion.

Arrangements are being made for trading of its common shares on the Barbados Stock Exchange, the bank said. Its ordinary shares are listed on the stock exchanges of Trinidad, Barbados and the Organisation of Eastern Caribbean States.

Requests to the JSE for comments on the matter were not answered up to press time.

Possible sale negotiations

CIBC FirstCaribbean side-stepped questions relating to possible negotiations under way to sell its operations in Jamaica.

Immediately following last week's announcement of the pending sale of the Jamaican operations of RBC Royal Bank to Sagicor Group Jamaica, new talk emerged that Sagicor was also assessing FirstCaribbean Jamaica as a potential acquisition.

But Parkhill said the possible delisting "in no way diminishes the bank's commitment to Jamaica. Jamaica is a key market for CIBC FirstCaribbean. We see opportunities to grow our business in Jamaica and, in fact, the bank recently boosted its capital in Jamaica to facilitate the execution of its growth strategies in that market".

For the year ended October 2013, CIBC FirstCaribbean Jamaica reported a net loss of J$903 million. Earlier in the year, the parent company announced that it would be injecting US$70 million into the Jamaica operations, for which FirstCaribbean Jamaica issued 528 million ordinary 'A' shares to its parent.

Consequently, the bank's share capital rose from J$1.4 billion to J$8.46 billion and its capital base almost doubled from J$7.9 billion to J$14 billion.

FirstCaribbean is at this time the fourth-largest of Jamaica's seven commercial banks, with group assets of J$56 billion.

avia.collinder@gleanerjm.com