TIDMCIHL
RNS Number : 0542O
Caribbean Investment Holdings Ltd
30 September 2019
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 FINANCIAL
RESULTS FOR THE FISCAL YEARED MARCH 31, 2019
Belize City, Belize, 30 September 2019 -- Caribbean Investment
Holdings Limited (London - AIM: CIHL; Bermuda: CIHL) (the "Company"
or "CIHL").
The Company reports that for the financial year ended 31 March
2019 it produced net income before tax of $14.7 million. This
represented a decrease of $13.1 million when compared to fiscal
2018's net income before tax of $27.8 million.
In November 2017, the Caribbean Court of Justice ruled in favor
of The Belize Bank Limited, the Group's largest subsidiary,
granting permission to The Belize Bank Limited to enforce an LCIA
Award in the same manner as a judgement or order of the Supreme
Court. This favorable ruling had significant positive impact on the
net earnings of fiscal 2018 particularly with an $11.0 million
reduction in impairment provisions recorded on the Government of
Belize receivable.
If interest income and impairment provisions related to the
Government of Belize receivable are excluded from the financial
results for both fiscal years - 2019 and 2018, net income before
taxes would be $12.9 million for fiscal 2019 and $10.7 million for
fiscal 2018, respectively, accounting for a 20.6% increase in the
adjusted and normalized net earnings before taxes.
The Company confirms that the annual report and accounts will be
made 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 website: http://www.cihltd.co.
Background Information
Caribbean Investment Holdings Limited ("CIHL") 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 ("BBL") 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.
Consolidated statement of comprehensive income
Expressed in millions of US dollars except where otherwise
stated
2019 2018
Year ended 31 March Notes $m $m
-------------------------------------------------------------------- ------ --------- ---------
Financial Services
Interest income 6 33.6 39.7
Interest expense 7 (5.5) (5.6)
-------------------------------------------------------------------- ------ --------- ---------
Net interest income 28.1 34.1
Credit (charge) of allowances for impairment of loans to customers 15 0.3 (3.9)
-------------------------------------------------------------------- ------ --------- ---------
Net interest income after allowance for loan losses 28.4 30.2
Non-interest income 8 8.5 19.2
Non-interest expense 9 (19.0) (17.9)
-------------------------------------------------------------------- ------ --------- ---------
Operating income - Financial Services 17.9 31.5
-------------------------------------------------------------------- ------ --------- ---------
Corporate
Corporate income 1.1 1.3
Corporate expenses (4.3) (5.0)
-------------------------------------------------------------------- ------ --------- ---------
Operating loss - Corporate (3.2) (3.7)
-------------------------------------------------------------------- ------ --------- ---------
Net income before tax 14.7 27.8
Taxation (4.0) (7.2)
-------------------------------------------------------------------- ------ --------- ---------
Net income after tax and before other comprehensive income 10.7 20.6
Other comprehensive income:
Net gain on financial assets at FVOCI 0.1 -
-------------------------------------------------------------------- ------ --------- ---------
Total comprehensive income 10.8 20.6
Earnings per ordinary share (basic and diluted) 10 0.11 0.21
-------------------------------------------------------------------- ------ --------- ---------
Consolidated statement of changes in shareholders' equity
Expressed in millions of US dollars except where otherwise
stated
Additional
Share paid-in Treasury Statutory Retained
capital capital shares reserve earnings Total
$m $m $m $m $m $m
---------------------------------- --------- --------------- ------------- ------------- ------------ ----------
As at 01 April 2017 0.6 52.8 (21.7) 2.7 20.8 55.2
Accumulated other
comprehensive loss - - - - (0.1) (0.1)
Acquisition of shares in
capital reorganisation (0.1) - - - - (0.1)
Transfer to statutory reserve - - - 4.3 (4.3) -
Dividends - - - - (0.1) (0.1)
Net income - - - - 20.6 20.6
---------------------------------- --------- --------------- ------------- ------------- ------------ ----------
As at 31 March 2018 0.5 52.8 (21.7) 7.0 36.9 75.5
---------------------------------- --------- --------------- ------------- ------------- ------------ ----------
As at 01 April 2018 as previously
reported 0.5 52.8 (21.7) - 36.9 75.5
Net impact of adopting IFRS 9
(Note 3(d)) - - - - 3.8 3.8
---------------------------------- --------- --------------- ------------- ------------- ------------ ----------
Restated opening balance under
IFRS 9 0.5 52.8 (21.7) - 40.7 79.3
Accumulated other - - - - 0.1 0.1
comprehensive income
Net income - - - - 10.7 10.7
---------------------------------- --------- ----------
As at 31 March 2019 0.5 52.8 (21.7) - 51.5 90.1
---------------------------------- --------- --------------- ------------- ------------- ------------ ----------
At 31 March 2019, The Belize Bank Limited maintained a
non-distributable statutory reserve of USD 7.0 million (2018 - USD
7.0 million and 2017 - USD 2.7 million). Belize Bank International
Limited did not have non-distributable statutory reserves.
Consolidated statement of financial position
Expressed in millions of US dollars except where otherwise
stated
2019 2018 2017
At March 31 Notes $m $m $m
-------------------------------------------------- ------ ----------- ----------- ----------
Assets
Financial Services
Cash and cash equivalents 11 11.3 12.8 12.0
Balances with the Central Bank of Belize 12 43.0 58.8 121.2
Due from banks (net of allowances) 13 43.9 52.1 19.0
Investment securities 14 132.9 95.1 46.4
Loans to customers (net of allowances) 15 236.9 237.8 268.0
Property, plant and equipment 16 19.4 20.2 18.6
Due from Government of Belize (net of allowance) 17 41.2 46.7 29.8
Other assets 6.7 6.2 10.9
Total Financial Services assets 535.3 529.7 525.9
-------------------------------------------------- ------ ----------- ----------- ----------
Corporate
Cash, cash equivalents, and due from banks 1.4 0.4 2.6
Other current assets 0.3 0.4 0.6
Total assets 537.0 530.5 529.1
-------------------------------------------------- ------ ----------- ----------- ----------
Liabilities and shareholders' equity
Financial Services
Customer accounts 18 430.4 435.0 453.5
Interest payable - - 3.4
Other liabilities 8.2 12.2 8.8
Total Financial Services liabilities 438.6 447.2 465.7
-------------------------------------------------- ------ ----------- ----------- ----------
Corporate
Current liabilities 8.3 7.8 8.2
Total liabilities 446.9 455.0 473.9
-------------------------------------------------- ------ ----------- ----------- ----------
Shareholders' equity:
Share capital (ordinary shares of no par value -
2019 (103,264,000) and 2018 (103,264,000) 20 0.5 0.5 0.6
Additional paid-in capital 52.8 52.8 52.8
Treasury shares 20 (21.7) (21.7) (21.7)
Retained earnings 58.5 43.9 23.5
-------------------------------------------------- ------ ----------- ----------- ----------
Total shareholders' equity 90.1 75.5 55.2
Total liabilities and shareholders' equity 537.0 530.5 529.1
-------------------------------------------------- ------ ----------- ----------- ----------
Consolidated statement of cash flows
Expressed in millions of US dollars except where otherwise
stated
2019 2018
Year ended March 31 $m $m
-------------------------------------------------------------------- ------------------------ ----------------------
Cash flows from operating activities
Net income before tax 14.7 27.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2.4 2.0
Allowance for impairment on loans to customers (0.3) 3.9
Gain on disposal of property, plant and equipment (0.1) (0.1)
Changes in operating assets and liabilities:
Decrease in interest payable - (3.4)
Decrease (increase) in Government of Belize receivable 5.5 (16.9)
(Increase) decrease in other and current assets (0.4) 4.9
(Decrease) increase in other and current liabilities (3.5) 3.0
Tax paid (4.0) (7.2)
Net cash provided by operating activities 14.3 14.0
-------------------------------------------------------------------- ------------------------ ----------------------
Cash flows from investing activities
Purchase of property, plant and equipment (net of disposals) (2.0) (3.6)
Proceeds from sale of property, plant and equipment 0.5 0.1
Increase in investment securities (37.8) (48.7)
Decrease in loans (net of charge-offs) to customers 5.0 26.3
Net cash utilised by investing activities (34.3) (25.9)
-------------------------------------------------------------------- ------------------------ ----------------------
Cash flows from financing activities
Decrease in customer accounts (4.6) (18.5)
Acquisition of shares - (0.1)
Dividends - (0.1)
Unrealized losses on securities 0.1 (0.1)
Net cash utilised by financing activities (4.5) (18.8)
-------------------------------------------------------------------- ------------------------ ----------------------
Net change in cash, cash equivalents and due from banks (24.5) (30.7)
Cash, cash equivalents and due from banks at the beginning of year 124.1 154.8
Cash, cash equivalents and due from banks at the end of year 99.6 124.1
-------------------------------------------------------------------- ------------------------ ----------------------
Cash and cash equivalents - financial services 11.3 12.8
Balances with Central Bank of Belize - financial services 43.0 58.8
Due from banks (net of allowances) - financial services 43.9 52.1
Cash, cash equivalents and due from banks - corporate 1.4 0.4
99.6 124.1
-------------------------------------------------------------------- ------------------------ ----------------------
Extracts from the Notes to consolidated financial statements
Note 6 - Interest income
2019 2018
Year ended March 31 $m $m
--------------------------------------------- ---------------- ----------------
Interest on loans to customers 28.0 31.5
Interest on Government of Belize receivable 2.5 6.1
Interest on securities 3.0 2.1
Interest on deposits with banks 0.1 -
Total interest income 33.6 39.7
---------------------------------------------- ---------------- ----------------
Note 7 - Interest expense
2019 2018
Year ended 31 March $m $m
------------------------------- ---------------- ----------------
Interest on customer accounts 5.5 5.6
Total interest expense 5.5 5.6
-------------------------------- ---------------- ----------------
Note 8 - Non-interest income
2019 2018
Year ended 31 March $m $m
-------------------------------------------------------------------- ----------------- ----------------
Foreign exchange income and commissions 3.5 2.9
Customer service and letter of credit fees 1.9 1.7
Credit card fees 1.8 2.0
Other financial and related services 1.0 1.3
Reduction in impairment allowance on due from Government of Belize - 11.0
Other income 0.3 0.3
Total non-interest income 8.5 19.2
--------------------------------------------------------------------- ----------------- ----------------
Note 9 - Non-interest expense
2019 2018
Year ended 31 March $m $m
---------------------------- -------- --------
Salaries and benefits 9.6 9.4
Depreciation expense 2.4 2.0
Premises and equipment 2.4 2.3
Other expenses 4.6 4.2
Total non-interest expense 19.0 17.9
---------------------------- -------- --------
Note 10 - 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 in each
year.
2019 2018
Year ended 31 March $m $m
------------------------------------------------------- ----------------------- -----------------------
Net income 10.7 20.6
------------------------------------------------------- ----------------------- -----------------------
Weighted average number of shares (basic and diluted) 99,520,017 99,520,017
------------------------------------------------------- ----------------------- -----------------------
Basic and diluted earnings per ordinary share 0.11 0.21
------------------------------------------------------- ----------------------- -----------------------
During the year ended 31 March 2019 and 2018 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 11 - Cash and cash equivalents
2019 2018 2017
At 31 March $m $m $m
------------------------------------- --------- --------- ---------
Cash in hand 9.5 9.4 9.6
Amounts in the course of collection 1.8 3.4 2.4
Total cash and cash equivalents 11.3 12.8 12.0
------------------------------------- --------- --------- ---------
Currency, liquidity, and interest rates risks analyses of cash
and cash equivalents are disclosed in Note 26.
Note 12 - Balances with the Central Bank of Belize
2019 2018 2017
At 31 March $m $m $m
---------------------------- --------- -------- --------
Statutory reserve balances 34.7 34.2 34.6
Operating balance 8.3 24.6 86.6
Total balances with CBB 43.0 58.8 121.2
---------------------------- --------- -------- --------
BBL is required to maintain an average minimum non-interest
bearing deposit balance with CBB equal to 8.5 percent of the
average deposit liabilities of BBL. At 31 March 2019, the actual
amount was 10.4 percent (2018 - 13.5 percent and 2017 - 28.7
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 CBB) equal to
23 percent of the average deposit liabilities of BBL. At 31 March
2019, the actual amount was 36.0 percent (2018 - 28.9 percent and
2017 - 33.7 percent). The statutory reserve balances are not
readily available to finance the day to day operations of the
banks.
Note 13 - Due from banks (net of allowances)
2019 2018 2017
At 31 March $m $m $m
---------------------------------------------- --------- --------- ---------
Due from banks 44.1 52.3 19.3
Less: impairment allowance on due from banks (0.2) (0.2) (0.3)
--------- --------- ---------
Total due from banks (net of allowances) 43.9 52.1 19.0
---------------------------------------------- --------- --------- ---------
The portfolio of balances held by both BBL and BBIL represents
instruments of short-term placements of temporary available cash in
other banks.
As at 31 March 2019, 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 USD 0.2
million (2018 - USD 0.2 million and 2017 - USD 0.6 million), which
had a related impairment allowance of USD 0.2 million (2018 - USD
0.2 million and 2017 - USD 0.3 million).
Movements in impairment allowance on due from banks were as
follows:
2019 2018
At 31 March $m $m
------------------------------------ ---------- ---------
At the beginning of the year (0.2) (0.30)
Charge during the year - -
Balances recovered during the year - 0.1
---------- ---------
(0.2) (0.2)
------------------------------------ ---------- ---------
Currency, liquidity, and interest rate risk analyses of cash and
cash equivalents are disclosed in Note 26.
As at 31 March 2019, BBL has utilised USD 4.2 million (2018 -
USD 4.2 million and 2017 - USD 4.2 million) of its balances held
with other financial institutions to be held as collateral for
certain credit lines and as required by the card brands. These
particular financial assets are pledged as collateral under terms
that are usual and customary for such transactions.
Note 14 - Investment securities
2019 2018 2017
At 31 March $m $m $m
--------------------------------- ----------- -------- --------
Securities - available for sale - 14.4 8.9
Securities - held to maturity - 80.7 37.5
Securities - at FVOCI 4.3 - -
Securities - at amortised cost 128.6 - -
Total investment securities 132.9 95.1 46.4
--------------------------------- ----------- -------- --------
Under IFRS 9 effective 1 January 2018, financial assets held in
a business model with intention to collect the contractual cash
flows and that contain contractual terms that give rise on
specified dates to cash flows that are SPPI, are measured at
amortised cost. Whilst the objective of the business model must be
to hold the financial asset to collect contractual cash flows this
does not mean that the Group is required to hold the financial
assets until maturity.
Securities held in a business model that is achieved by both
collecting contractual cash flows and selling and that contain
contractual terms that give rise on specified dates to cash flows
that are SPPI are measured at fair value through other
comprehensive income.
For fiscal 2018, the accounting for the securities was under IAS
39. The majority of the securities were treated as available for
sale financial assets and were held at fair value with gains and
losses being included in other comprehensive income.
Note 15 - Loans to customers (net of allowances)
2019 2018 2017
At 31 March $m $m $m
--------------------------- ---------------- ------------- ---------------
Loans:
Residential mortgage 37.9 43.4 41.8
Credit card 9.2 9.3 9.0
Other consumer 54.6 50.5 45.2
Commercial - real estate 45.8 50.5 58.4
Commercial - other 98.7 104.2 145.1
246.2 257.9 299.5
--------------------------- ---------------- ------------- ---------------
Allowance for loan losses:
Residential mortgage (0.8) (3.9) (3.5)
Credit card (0.3) (0.3) (0.3)
Other consumer (2.3) (1.9) (1.5)
Commercial - real estate (0.9) (2.4) (8.4)
Commercial - other (5.0) (11.6) (17.8)
(9.3) (20.1) (31.5)
--------------------------- ---------------- ------------- ---------------
Loans (net of
impairment allowance):
Residential mortgage 37.1 39.5 38.3
Credit card 8.9 9.0 8.7
Other consumer 52.3 48.6 43.7
Commercial - real estate 44.9 48.1 50.0
Commercial - other 93.7 92.6 127.3
--------------------------- ---------------- ------------- ---------------
Loans (net of
impairment allowance): 236.9 237.8 268.0
--------------------------- ---------------- ------------- ---------------
Individually impaired loans with allocated allowances were as
follows:
2018 2017
At 31 March $m $m
-------------------------------------------------- ------------------ ---------------------
Non performing 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
-------------------------------------------------- ------------------ ---------------------
Changes in the allowance for loan losses were as follows:
2018 2017
Year ended 31 March $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
---------------------------------------------- ---------------- -------------
Balances presented in the tables above reflect the application
of IAS 39 in determining the impairment allowances for the years
ended 31 March 2018 and 2017.
The table below shows the staging of the loans to customers and
the related ECL's.
As at 31 March 2019 01 April 2018
---------------------------------------------- ----------------------------- -----------------------------
Gross loans 246.2 257.9
Stage 1: 12 Month ECL (2.9) (1.8)
Stage 2: Lifetime ECL (1.0) (2.4)
Stage 3: Lifetime ECL (5.4) (12.1)
Total loans to customers (net of allowances) 236.9 241.6
---------------------------------------------- ----------------------------- -----------------------------
The table below shows the movement in the impairment allowance
by stage:
Impairment allowance
Stage 1 Stage 2 Stage 3 Total
$m $m $m $m
-------------------------- --------------------- --------------------- --------------------- ---------------------
Impairment allowance as
at 01 April 2018 1.8 2.4 12.1 16.3
ECL on new instruments
issued during the year 2.6 0.2 0.3 3.1
Other credit loss
movements, repayments
and transfers (1.5) (1.6) (2.1) (5.2)
Charge offs and write
offs - - (4.9) (4.9)
Impairment allowance as
at 31 March 2019 2.9 1.0 5.4 9.3
-------------------------- --------------------- --------------------- --------------------- ---------------------
The table below reflects outstanding loans by industry
classifications.
2019 2018 2017
At 31 March Amount % Amount % Amount %
--------------------------- ---------------- ------- ---------------- ------- ------------- -------
Other consumer loans 63.9 26.0% 59.8 23.2% 54.2 18.1%
Real estate 60.4 24.5% 69.5 27.0% 78.6 26.3%
Building and construction 29.0 11.8% 32.9 12.8% 36.2 12.1%
Distribution 19.8 8.0% 20.1 7.8% 23.3 7.8%
Agriculture 17.0 6.9% 19.5 7.6% 48.6 16.2%
Transportation 14.8 6.0% 15.2 5.9% 15.7 5.2%
Manufacturing 12.0 4.9% 1.9 0.7% 1.5 0.5%
Tourism 11.1 4.5% 14.8 5.7% 16.7 5.6%
Marine Products 6.3 2.6% 11.2 4.3% 12.6 4.2%
Utilities 5.6 2.3% 5.5 2.1% 5.2 1.7%
Professional services 5.3 2.2% 6.7 2.6% 4.3 1.4%
Government 0.7 0.3% 0.5 0.2% 1.2 0.4%
Entertainment 0.1 0.0% 0.2 0.1% 0.2 0.1%
Mining and exploration 0.1 0.0% 0.1 0.0% 0.8 0.3%
Forestry 0.1 0.0% - 0.0% 0.3 0.1%
Financial institutions - 0.0% - 0.0% 0.1 0.0%
Total loans 246.2 100.0% 257.9 100.0% 299.5 100.0%
--------------------------- ---------------- ------- ---------------- ------- ------------- -------
At 31 March 2019, the Group had total loans outstanding to
certain officers and employees of USD 10.4 million (2018 - USD 9.7
million and 2017 - USD 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. The transfer
value loss on these loans had not been considered material and
therefore had not been included in these consolidated financial
statements.
Note 16 - Property, plant and equipment
Property, plant and equipment of the Group as at 31 March 2019
and 2018 comprised the following:
Furniture, Computer and
fixtures and office Motor Work in
Land Premises other equipment equipment vehicles progress Total
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Cost
As at 1 April
2018 1.5 15.5 6.8 9.5 2.3 0.2 35.8
Additions 0.1 - 0.2 0.9 0.7 0.1 2.0
Disposals - (0.3) (0.3) (0.2) (0.7) - (1.5)
Transfers - 0.1 0.1 - - (0.2) -
As at 31 March
2019 1.6 15.3 6.8 10.2 2.3 0.1 36.3
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Depreciation
As at 1 April
2018 - (5.1) (4.0) (5.1) (1.4) - (15.6)
Charge for the
period - (0.4) (0.6) (1.0) (0.4) - (2.4)
Eliminated on
disposals - 0.1 0.3 0.2 0.5 - 1.1
As at 31 March
2019 - (5.4) (4.3) (5.9) (1.3) - (16.9)
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Net book value
As at 31 March
2019 1.6 9.9 2.5 4.3 1.0 0.1 19.4
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
As at 31 March
2018 1.5 10.4 2.8 4.4 0.9 0.2 20.2
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Property, plant and equipment of the Group as at 31 March 2018
and 2017 comprised the following:
Furniture, Computer and
fixtures and office Motor Work in
Land Premises other equipment equipment vehicles progress Total
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Cost
As at 1 April
2017 1.3 15.5 5.7 5.6 2.0 2.8 32.9
Additions 0.2 0.1 1.2 1.4 0.7 - 3.6
Disposals - (0.1) (0.1) (0.1) (0.4) (0.7)
Transfers - - - 2.6 - (2.6) -
As at 31 March
2018 1.5 15.5 6.8 9.5 2.3 0.2 35.8
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Depreciation
As at 1 April
2017 - (4.7) (3.4) (4.7) (1.5) - (14.3)
Charge for the
period - (0.5) (0.6) (0.7) (0.3) - (2.1)
Eliminated on
disposals - 0.1 - 0.3 0.4 - 0.8
As at 31 March
2018 - (5.1) (4.0) (5.1) (1.4) - (15.6)
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Net book value
As at 31 March
2018 1.5 10.4 2.8 4.4 0.9 0.2 20.2
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
As at 31 March
2017 1.3 10.8 2.3 0.9 0.5 2.8 18.6
--------------- ------ -------------- ---------------- ---------------- -------------- -------------- ---------
Total capital expenditures for the year ended 31 March 2019 was
USD 2.0 million (2018 - USD 3.6 million and 2017 - USD 4.3
million). Total depreciation expense for the year ended 31 March
2019 was USD 2.4 million (2018 - USD 2.0 million).
As at 31 March 2019 the Group's buildings, vehicles, ATMs and
other equipment were insured for USD 22.1 million (2018 - USD 22.6
million and 2017- USD 23.9 million).
As at 31 March 2019 historical cost of fully depreciated fixed
assets amounted to USD 7.2 million (2018 - USD 6.9 million and 2017
- USD 6.2 million).
Note 17 - Due from Government of Belize (net of allowance)
2019 2018 2017
At 31 March $m $m $m
----------------------------- --------- --------- --------
Amounts receivable from GOB 42.0 46.8 40.8
Less: impairment allowance (0.8) (0.1) (11.0)
Total due from the GOB 41.2 46.7 29.8
----------------------------- --------- --------- --------
Movements in impairment allowance on due from GOB.
2019 2018
At 31 March $m $m
--------------------------- --------- ---------
At beginning of the year (0.1) (11.0)
Charge during the year (0.7) (0.1)
Reduction during the year - 11.0
At the end of the year (0.8) (0.1)
--------------------------- --------- ---------
On 23 March 2007, a loan note was issued to 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 CBB directed BBL to remove this
receivable from the BBL's accounts; this exclusion resulted in the
auditor issuing a qualified opinion on the 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 04 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 03 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 09 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
took place on 17 September, 2018 and the Court granted BBL's
application for the trial of certain preliminary issues namely: (i)
whether the Minister of Finance failed to comply with his statutory
duty imposed by section 25(3) of the Crown Proceedings Act Cap 167
of the Laws of Belize; and (ii) whether an Order ought to be made
directing the Minister of Finance to pay the sum due under the
Certificate Order or Judgement Debt (less amounts set-off as
Business Tax) within 10 days of the Order. The trial of the
preliminary issues took place on 05 and 06 December 2018 and BBL is
awaiting the Belize Supreme Court's decision.
On 28 June 2018 BBL filed a claim against the Commissioner of
Income and Business Tax and the Attorney General of Belize (both
being representatives of the GOB) in light of the Commissioner's
refusal to set-off the Business Tax owed to the Government by BBL
notwithstanding being duly authorised by BBL to satisfy the taxes
due by way of set-off against the Judgement Debt. The trial of
BBL's claim took place on 22 January 2019 at the Supreme Court of
Belize. The Court had difficulty accepting the Government's
arguments and found in favour of BBL. The Court ordered: (i) a
Declaration that the decision of the Commissioner; refusing to
set-off BBL's tax liability against the Judgement Debt is
unreasonable, disproportionate, unlawful and therefore inequitable;
(ii) a Declaration that the decision of the Commissioner not to
consider garnishing BBL's tax debt from the Judgement Debt is
unlawful; (iii) an Order restraining the Commissioner whether by
herself, her servants and her agents from seeking to enforce the
tax liability against BBL, and (iv) the Government to pay BBL its
cost to be agreed or assessed. The decision of the court was orally
delivered on 22 January 2019 and the written judgement handed down
on 08 February 2019. The decision of the Supreme Court of Belize
legally endorsed BBL's right to authorise the Government to set-off
all Business Tax owed to the Government by BBL against the
Judgement Debt. The Government has since appealed the decision of
the Supreme Court to the Belize Court of Appeal but no stay of the
effect of this decision has been granted to the Government. No date
has been fixed for the hearing of the appeal and no hearing date is
expected prior to the first sitting of the Belize Court of Appeal
in March 2020.
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 09 January
2016. On 08 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 08 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 09 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 12 March 2018, the United States
District Court ordered that BBL may now seek attachment or
execution of GOB 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 18 - Customer accounts
2019 2018 2017
At 31 March $m $m $m
------------------------- ------------- -------------- -----------------
Term deposits 184.2 192.9 214.0
Current/demand deposits 160.6 163.1 166.2
Savings deposits 85.6 79.0 73.3
Total customer accounts 430.4 435.0 453.5
------------------------- ------------- -------------- -----------------
Included in term deposits at 31 March 2019 were USD 8.0 million
(2018 - USD 8.7 million and 2017 - USD 12.7 million) of term
deposits denominated in US dollars and nil (2018 - nil) denominated
in UK pounds sterling. Included in demand deposits at 31 March 2019
were USD 16.7 million (2018 - USD 18.8 million and 2017 - USD 20.6
million) of demand deposits denominated in US dollars and USD 0.2
million (2018 - USD 0.2 million and 2017 - USD 0.2 million)
denominated in UK pounds sterling.
As at 31 March 2019, USD 8.6 million of customer account
balances (2018 - USD 5.7 million and 2017 - USD 2.6 million) is
held as collateral for banking operations.
The twenty largest deposit customers account for 31.0% of total
deposits (2018 - 29.4% and 2017 - 31.6%).
Note 20 - Share capital
2019 2018 2017
At 31 March $m $m $m
----------------------------------- --------------------- ----------------- --------------
Authorised
Ordinary shares:
200,000,000 shares of no par value 2.0 2.0 2.0
Preference shares:
14,000,000 shares of $1.00 each 14.0 14.0 14.0
Total authorised 16.0 16.0 16.0
----------------------------------- --------------------- ----------------- --------------
Issued and outstanding
Ordinary shares:
103,264,000 shares of no
par value (2018 - 103,264,000)
(2017 - 103,642,984) 0.5 0.5 0.5
----------------------------------- --------------------- ----------------- --------------
Treasury Shares
During the three years ended 31 March 2019, 2018, and 2017 there
has been no movement in treasury shares.
Number $m
------------------ ---------------- ----------------
At 31 March 2017 4,297,228 21.7
------------------ ---------------- ----------------
At 31 March 2018 4,297,228 21.7
------------------ ---------------- ----------------
At 31 March 2019 4,297,228 21.7
------------------ ---------------- ----------------
On 13 September 2018, the Board of Directors agreed to the
cancellation of all existing Treasury Shares; the cancellation
process should be completed by the end of March 2020.
Share Options
The Company 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 the Company. Options are
generally granted to purchase the Company's 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 31 March 2017 7,249,997 $1.95
------------------------------ ---------------- ---------
Outstanding at 31 March 2018 7,249,997 $1.95
------------------------------ ---------------- ---------
Outstanding at 31 March 2019 7,249,997 $1.95
------------------------------ ---------------- ---------
During the year ended 31 March 2019, no outstanding options were
exercised.
In August 2008, the Company granted options over 6,999,997
ordinary shares at an exercise price of USD 6.50 per share which
vest and are exercisable in three equal instalments on 01 August
2012, 01 August 2013 and 01 August 2014. The term of these options
extended to 01 August 2019; they have now expired.
In May 2009, the Company granted options over a further 250,000
ordinary shares at the exercise price of USD 6.50 per share which
vest and are exercisable in three instalments on 01 June 2013, 01
June 2014 and 01 June 2015. The term of these options extends to 01
June 2020.
The exercise price of all options was adjusted to USD 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 31 March 2019 (2018 - nil).
The fair value of each option grant in 2008 and 2009 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 SEIEEUFUSEDU
(END) Dow Jones Newswires
September 30, 2019 02:02 ET (06:02 GMT)
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