After Completing Trinidad’s TT$1 Billion IPO (Largest Ever), First Citizens Bank Begins Trading Today

September 16, 2013
First Citizens Trinidad & Tobago

First Citizens Trinidad & Tobago

As Trinidad’s fast rising star in the banking sector (First Citizens Bank) begins trading on the Trinidad and Tobago Stock Exchange today here are 21 things that you need to know about them.

21 Must Know Things About First Citizens and Their BIG IPO

  1. First Citizens Bank, launched the largest ever Initial Public Offering (IPO) of shares in the history of the Trinidad & Tobago Stock Exchange with a market value of approximately TTD 1.1 billion on Monday 15th July at an Offer Price of TTD22.00 per share.
  2. THE OFFERING: 48,495,665 shares in the Bank were offered for sale to the public, representing approximately 19.3% of the total shareholding.
  3. First Citizens will be listed on the T&T Stock Exchange (TTSE) today Monday September 16, 2013, with trading beginning on the same day. The symbol for First Citizens will be FIRST and shares, listed at a price of $22 each, will be traded in the Banking Sector of the First Tier Market.
  4. HISTORY: The First Citizens Group is one of the leading financial services groups in Trinidad & Tobago and the Caribbean region and they conduct a broad range of banking and financial services activities, including consumer banking, corporate and commercial banking, wealth and asset management, capital market transactions, trustee and brokerage services and currently has ten active subsidiaries.
  5. First Citizens Bank Limited, a full service bank, is the largest part of the Group and has an extensive retail branch network in Trinidad & Tobago with a large deployment of ATM and point-of-sale service in both islands.
  6. First Citizens Bank Ltd was established with the objective of acquiring and taking over, as a going concern, the business and assets of Workers’ Bank (1989) Ltd. (Workers’ Bank), the National Commercial Bank of Trinidad and Tobago Limited (NCB) and the Trinidad Cooperative Bank Limited (TCB).* (see footnote below)
  7. PERFORMANCE & GROWTH: In the 10 years to 2003 First Citizens Bank grew its profits to TTD233 million, doubled its asset base to TTD6.1 billion and had attained international credit ratings of BBB- and A-3 by S&P and Moody’s, respectively.
  8. They are the highest-rated, indigenous financial institution in the English-speaking Caribbean, with long-term foreign currency counterparty credit ratings of Baa1 from Moody’s Investors Service (Moody’s) and BBB+ from Standard and Poor’s (September 2012).
  9. By 2004, First Citizens Bank was the third largest bank in Trinidad & Tobago, with assets of TTD7,900 million, and in 2006 the non-performing loan portfolio stood at only 0.8%, the lowest in the sector and well below the industry average of 2%.
  10. ACQUISITIONS & EXPANSION: In 2009, First Citizens acquired Caribbean Money Market Brokers Limited now rebranded as First Citizens Investment Services Limited, a full service securities company with offices in Trinidad & Tobago, Barbados, St. Vincent and St. Lucia.
  11. In January 2012, the Group opened a representative banking office in Costa Rica as the Bank’s first entrance into Central America.
  12. In August 2012, the Group continued its expansion with the acquisition of Butterfield Bank in Barbados, now called First Citizens Bank (Barbados) Limited.
  13.  As of March 31, 2013, First Citizens and its subsidiaries employed 1,664 permanent employees.
  14. First Citizens Financial Performance

    First Citizens 5 year Financial Performance

    PROFITABILITY: For the year ended September 30, 2012, the Group recorded a profit before tax of TTD$714.2 million – a compound annual growth rate (CAGR) of 9% from 2008. This growth in earnings has been principally driven by:

    1. 21% CAGR in Total Assets;
    2. 12% CAGR in Total Loans; and
    3. CAGR of 27% in Investments.
  15. The Group continues to grow profits and is well capitalized with a capital/assets ratio of 16.9%, as at September 30, 2012. As at that date, the Group’s Capital Adequacy Ratio (ratio of Tier 1 capital to risk weighted assets) stood at 58.0%.*2
  16. AWARDS: In 2012, First Citizens won Best Bank World Finance Banking Award – Trinidad & Tobago (The Banker Magazine), and was named among the Top 5 Safest Banks in Latin America and the Caribbean (Global Finance). Other awards bestowed on First Citizens over the years include “the safest bank in the English-speaking Caribbean” in 2012, 2011 and 2010 (Global Finance Magazine); Best Bank in Trinidad & Tobago 2010 (World Finance); Bank of The Year 2009 (The Banker Magazine, Latin Finance and World Finance).
  17. LOCATIONS: As of March 31, 2013, First Citizens conducted business at 26 full service banking locations, one foreign exchange bureau, seven operations centres, five commercial business centers, a learning centre and 96 ATM machines. In Barbados, these services are provided via five branches, one lending centre and eight ATMs
  18. BANKING INDUSTRY: The banking industry in Trinidad & Tobago is relatively well-developed due primarily to the country’s established energy and petrochemical industry and strong manufacturing base, as compared to the agriculture and tourism-based economies of the wider Caribbean region. Apart from First Citizens Bank, there are currently seven other commercial banks licensed under the FIA by the Central Bank to operate in Trinidad & Tobago, namely:
    1. Citibank (Trinidad & Tobago) Limited (Citibank)
    2. FirstCaribbean International Bank Limited (FCIB)
    3. Intercommercial Bank Limited (IBL)
    4. Republic Bank Limited (RBL)
    5. RBC Financial (Caribbean) Limited (RBC)
    6. Scotiabank Trinidad & Tobago Limited (Scotia)
    7. Bank of Baroda (Trinidad & Tobago) Limited (BoB)
  19. Of the eight locally registered banks, FCIB, RBL and Scotia are publicly traded on the TTSE. Further, National Commercial Bank of Jamaica has obtained a cross listing on the TTSE but operates only in Jamaica. Competition also arises from other financial institutions, including credit unions, unit trusts, insurance companies, merchant and investment banks, and finance companies which offer similar products and services
  20. USE OF FUNDS: The IPO will assist the Bank in widening its capital base in order to facilitate its future strategic expansion plans.
  21. First Citizens Brokerage & Advisory Services (a subsidiary of First Citizens Investment Services) was the Lead Broker for the Offer for Sale.

* – At that time, these indigenous banks were faced with the effects of inadequate capitalisation and/or low loan asset quality which, combined with their competitive weaknesses and scale, made it difficult for them to overcome the constraints on their profitability, the effect of which was exacerbated by the economic downturn which the country was experiencing at that time. Workers’ Bank and TCB were majority-owned by the Government while Government of the Republic of Trinidad and Tobago held a 33% interest in NCB. At that time, 62% of its loan portfolio was in arrears, and the Bank was ranked last in the commercial banking sector.

*2 – Tier 1 capital refers to share capital, retained earnings and reserves created by appropriations of retained earnings

Sources

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