First Citizens offers almost 11m shares for public purchase

KAREN DARBASIE CEO of First Citizens Financial Holding Group Ltd said she believed that people would participate in the recently announced additional public offering (APO) for one main reason – the bank has shown steady and consistent growth and is showing a growing potential.

“We think our balance sheet is robust, we have shown that our growth has been keeping strong. Our growth has not been at the expense of increasing non-performing loans. We have been growing our capital and loan portfolio, we have been mindful of concentration risk and trying to grow in all segments. Our earnings have been steady, our capital position is strong, our dividend payout is consistent and the share price has shown a demonstrated growth story,” Darbasie said.

She was speaking to reporters at a press conference on Thursday at the group's offices after the announcement of the APO.

The bank is offering 10,869,565 in shares at $50 a share which Finance Minister Colm Imbert said during the 2021-2022 budget presentation last October could raise a total of about $550 million.

Darbasie said the group has successfully grown its core operations over the past decade, which shows in its asset base, which grew 4.20 per cent, its shareholders equity which grew 4.49 per cent, its total loans, which increased by 7.6 per cent, its investments which grew by 4.32 per cent and its profit before tax which grew by 3.19 per cent.

According to its 2021 annual report, the group’s total assets amount to $46.6 billion and it has a capital base of $7.94 billion.

Darbasie added that the group is also continuing its growth. One measure she highlighted was the negotiations for senior unsecured financing from the Inter-American Development Bank for up to US$175 million announced earlier this week. That money would be used to facilitate household mortgage solutions to low and mid-income customers, implement digital transformation initiatives and expand its ability to lend to small and medium enterprises.

She also said the group is still interested in doing business in Guyana, despite the recent termination of the acquisition of Scotiabank Guyana. She blamed covid19 for the end of the agreement saying that the deal simply ran out of time.

“Nobody really thought covid19 would have taken so long and the process stretched out and it came to an end. It was not declined it just came to an end,” she said. “We are interested in lending to entities and projects in Guyana we will do that only with the requisite regulatory approval from the Bank of Guyana and we continue to try to explore opportunities.”

She added that several mitigation measures were put in place to ensure that a situation similar to the 2013 APO – which saw an employee use an insider position to acquire 659,588 shares from the bank.

“There is no bucket in the APO for first citizens employees, so first citizens employees apply, if they are allowed to, along with all the other individuals in the country.”

She added that the senior management team is specifically prohibited from participating in the APO.

“They were prohibited in the last APO (in 2017),” she said.

“In addition, employees who are putting in applications, our legal and governance team are communicating with the teams that are taking the application to advise who are prohibited from purchasing shares in the APO and that communication is very clear so that if something comes in, the person at the front end receiving the application will be able to say this is not allowed and refer to governance.”

Darbasie added that the offer of the shares is a particularly good opportunity to purchase a significant amount of shares, that would not normally be available.

"If you look at the volume of shares, the average trading on a daily basis is small," she said. "This is an opportunity if you really want to get an investment and a number of people want to make that investment because the story of the group historically is there. The opportunity to buy shares in a reasonable quantity is there. Also you wouldn’t have to pay commissions and fees government as pays for all the fees."