IMPROVED performances from its overseas investments have helped Republic Financial Holdings Ltd (RFHL) record a near billion-dollar profit for the three quarters of financial year 2018.
The parent company of the country’s biggest commercial bank, Republic, is reporting a $993.3 million profit for the first nine months of financial year 2018, up to June 30, up $34.4 million or 3.6 per cent from the same period last year, RFHL said in a release. The company’s total assets were $69.6 billion.
“As was the case for the first half of the fiscal year, the improvement in profitability was driven mainly by better performance in our overseas subsidiaries. The profitability of the Trinidad and Tobago operations remains flat due to an increase in the tax rate,” chairman Ronald Harford said.
In the 2018 budget statement, the government raised the corporation tax for commercial banks from 30 per cent, the standard rate, to 35 per cent.
The bank also adopted the International Accounting Standards Board’s International Financial Accounting Standards article 9, which requires assets to be recorded at fair value (market value) or else transaction value, and also requires more detailed reporting for classification and measurement of risk, impairments and hedging. RFHL adopted IFRS 9 in the third quarter of fiscal year 2018, with effect from October 1, 2017. Since then, the bank has had to readjust its equity with a reduction of $988.2 million, mainly because of its exposure to Government of Barbados debt. Barbados, which has sought assistance from the International Monetary Fund to restructure its economy, has suspended all external debt payments while it undergoes its transition.
West Indian Tobacco Co Ltd (Witco) also posted a profit for the first half of 2018 (January to June), reporting net income of $193.7 million, an 8.7 per cent increase over the same period last year. The company’s revenues also increased 11.7 per cent to $455.6 million.
RFHL is the best performing stock on the TT Stock Exchange, followed by Witco. Both closed the day’s trading at $102.81 and $87, respectively.
RFHL is also the main constituent (26.1 per cent) of the National Investment Fund, as well as its primary dividend earner (54 per cent). Witco shares make up 5.1 per cent of the NIF and contribute five percent of dividend earnings. The state is offering $4 billion worth of asset-backed bonds that will be honoured using the dividend earnings from $8 billion worth of shares in the NIF. The government will then use the $4 billion raised to help balance its fiscal deficit.