Transcript Sharon Christopher, "First Citizens Bank: A Success Story"

First Citizens Bank
A Success Story
Presented by Sharon L Christopher
Deputy Chief Executive Officer, First Citizens Bank Ltd
At CAIB 34th Annual Conference – Guyana
November 13th, 2007
1
Trinidad Co-operative Bank (The Penny Bank)
• The Country’s first indigenous bank (locally grown, locally
funded and locally owned)
• Incorporated in 1914 as a savings institution “to inculcate in
the people the virtue of thrift…and to provide a quick, easy,
safe means for children and poor people to save small sums
and put by for the coming of a rainy day”
• At that time the other Banks were “exclusively the bank of
upper classes and the large sugar companies”
2
The Penny Bank (cont’d)
• Pioneered the provision of low cost housing in Trinidad
•1976 – Bank obtained a license under the Banking Act, to
operate as a commercial bank
3
The National Commercial Bank (NCB)
• Unveiled on July 01, 1970, 4 months after the Black Power
uprising exploded in Port-of-Spain.
• Prime Minister Williams mandated the bank to grow to fly
the flag of nationalism: “it is our aim, our duty to convert this
into a vibrant financial giant geared to the development
needs of the country, of the existing business community, of
the prospective investor, industrialist, farmer or trader. Here
is your opportunity. Seize it with both hands”
4
National Commercial Bank (cont’d)
Philip Rochford
• “When the National Commercial Bank was established,
there was no history of local persons owning, controlling and
managing significant local resources. I accepted the
challenge to establish the Bank and prove that persons born,
bred and educated in Trinidad and Tobago were capable of
managing their own affairs successfully.”
5
National Commercial Bank (cont’d)
A series of “firsts”
• The promotion of the concept of relationship banking.
Rochford: “the conservative banking of yesterday had to be
replaced by the aggressive banker of today”
• Rochford introduced a policy that anyone working in the
bank from a clerk upwards had to have a minimum of 5
O’Levels including Mathematics and English. The old mode
of hiring on the basis of class and colour had to be replaced
by a meritocracy
• Rochford introduced a policy of taking into account a wife’s
earnings when assessing the qualifying income of mortgage
applicants
6
National Commercial Bank (cont’d)
A series of “firsts” cont’d
• First bank to offer life insurance on loans
• First bank to introduce equal pay for work of equal value
• Introduced the Platform System
• Introduced the first local VISA Gold Credit Card
7
Rochford – 1991 (21st Anniversary of the Bank)
• “The Bank has unquestionably been a pioneer in promoting
self – determination in our people. However, bad habits and
old perceptions die hard. Too many people still believe that
national is synonymous with being substandard.
Unfortunately, some of our own staff members have been
influenced by this perception. Some believe that only foreign
and international things are good.”
8
Workers Bank of Trinidad and Tobago - 1970
• SWWTU proposed the establishment of some avenue for
investing, because some of its members had received
substantial severance payments
Banks set up by the Act of Parliament had the main aim of
“assisting in the economic welfare of workers, trade unions
and staff associations, by providing banking facilities
especially designed to encourage thrift and the prudent
utilization of savings.
• Bank not GOTT owned. Over 66% of shares held by trade
unions.
9
Workers Bank - Achievements
• Advanced electronic data processing unit
• 1979 – Introduced the first ATM – Mary Anne
• 1983 – Varinstall Mortgages – part of a deliberate strategy
to help low and middle income families own their own homes
• Only financial institution to invest exclusively in local art
10
Workers Bank (1989) Limited
• April 1989 – Workers Bank of Trinidad and Tobago was
closed by the Central Bank
• May 22 – WB (1989) Ltd, a new company was opened for
business. The new Company was to have been named First
Citizens, however, the GOTT felt that the name Workers
Bank still garnered goodwill from the public
11
Workers Bank (1989) Limited - Achievements
Technology
• 1995: Major achievement – the purchase of the Profile
system which remains the core of the Bank’s information
systems
• Profile (modular and flexible) allows First Citizens to be
First in Technology. Profile introduced to Trinidad and
Tobago, the online, real time service
12
First Citizens Bank Birth
• Established 1993
• Acquired assets and liabilities of NCB,TCB and Workers
Bank
• As at September 30 1994:
– 3.47 billion Assets
– 1,300 employees
– $557 Million in non-performing loans
13
Consolidation 1993 to 1996
• Staff
• Premises
• Systems
• Policies and Procedures
14
Vision
“To become the most competitive financial group in
Trinidad and Tobago with a well established international
presence”.
15
Mission
“Our aim is to build a highly profitable financial services
franchise renowned for innovativeness, service
excellence and sound corporate governance. We shall
achieve our aim by focusing on continuous improvement
of systems and products, building a strong base of
knowledge workers and creating strategic partnerships in
key sectors that add value to our franchise”.
16
Organizational Transformation 1997 onwards
• Building the product portfolio – MIDAS (now eFirst),
Credit Cards (First International Credit Card), Debit /
POS acquiring and Telebanking Services
• Deepening the Human Resource competence – 360
degree assessments
17
First Citizens Achievements
1998
• Green Leaf Award from the EMA, for the Citizens in
Action to Restore the Environment (C.A.R.E.) initiatives
2000
• The first Bank in the entire English-speaking Caribbean
to launch an Internet Bank
2001
• Standard and Poor’s Investment Grade Rating
• Tyrone Samlalsingh Pinnacle Award from South
Chamber of Industry & Commerce for excellence in
innovation in information, communications technology
and e-commerce
18
First Citizens Achievements
2002
• Upgrade in Standard and Poor’s investment grade rating
outlook
• Awarded the Bank of the Year 2002 by Latin Finance
2003
• First in Soundness from The Banker Magazine
• For the second time - Tyrone Samlalsingh Pinnacle Award
from South Chamber of Industry & Commerce for
excellence in innovation in information, communications
technology and e-commerce
• Upgrade in Standard and Poor’s rating outlook
19
First Citizens Achievements
2004
•First domestic financial institution to issue a US $100
Million Bond in the International Market
•Fourth (4th ) consecutive annual credit ratings upgrade by
Standard & Poor’s to BBB/stable – highest rating among the
local financial institutions from an international credit rating
agency
• Issued the first SEC approved Energy Fund
•Became the third largest Bank in Trinidad & Tobago, moving
past Scotiabank
20
First Citizens Achievements
2005
• First Citizens again raised US $100 Million Bond on the
International Market.
• Moody’s Investor Services Inc. upgraded the long-term
senior unsecured debt issued by First Citizens (St.Lucia)
to A2. The first time a debt issued by a local financial
institution has been assigned an ‘A’ rating by an
international credit rating agency.
• Awarded “Bank of the Year 2005” by the Banker
Magazine, a subsidiary of the Financial Times
21
First Citizens Achievements
2006
• For the third time - Tyrone Samlalsingh Pinnacle Award
from South Chamber of Industry & Commerce for
Technology and E-Commerce
• Moody’s Investor Services Inc.
• Upgraded the long-term senior unsecured debt
issued by First Citizens (St.Lucia) to A1.
22
Total Group Assets (in TT Billion dollars)
The First Citizens Group’s asset base has continued to grow at an
average rate of 16% to $14.7B at August 2007.
$Bn
14.7
15.0
12.7
11.6
12.0
8.4
9.0
6.0
3.8
4.5
4.7
1998
1999
5.2
6.1
6.6
7.0
3.0
0.0
1997
2000
2001
2002
2003
2004 2005* 2006 August
2007
* Restated
23
Profit Before Tax (in TT Millions of dollars)
The Group has shown a continuous growth in Profit Before Tax over the last
14 years.
$Mn
500
450
404
400
345
316
Profit Before Tax (in millions of dollars)
300
233
198
200
80
100
103
134
7
0
1994 1999 2000 2001 2002 2003 2004 2005* 2006 2007
24
Achievements 2006/2007
1. Fourth consecutive year a dividend of $130.0M was
paid. Total dividends paid now in excess of $500M.
2. Our Strategies for Service Excellence was
launched under the theme ‘first citizens serving First
Citizens’ on March 2007.
3. Received the highest accreditation
International Institute of Internal Auditors
25
from
the
Cont’d- Achievements 2006/2007
4. Completed the successful conversion to Profile Version
6.2.
5. Implemented a comprehensive range of initiatives to
ensure compliance with OSHA requirements.
6. Best performing Equity Mutual Fund (Immortelle) in 2006
– Trinidad Business Guardian.
26
Cont’d- Achievements 2006/2007
7. First Citizens Safety Officer was awarded the “Individual
of the Year” Award at the Inaugural OSH Awards by the
T&T Occupational Safety & Health Authority
8. Standard and Poor’s Ratings Services upgraded First
Citizens Bank counterparty credit and CD ratings from
BBB/A-2 to BBB+/A-2
Ratings of the US $100 million bonds from First Citizens
were also upgraded from BBB to BBB+
27
Total Gross Loans
The Group has shown consistent loan growth over the last five-year period.
Gross Loans
8,000
7,034
7,000
6,000
4,572
5,000
4,000
3,000
5,058
3,215
2,438
2,000
1,000
0
2003
2004
2005
Estimated 2007
28
2006
2007
Asset Quality Indicators
Loan Quality
PDL/ Total Loans
Non Performing Loans
15
11.6
8.7
10
%
The Group continued to maintain tight control
over asset quality as non performing loans
continue to be less than 2% of the loan portfolio
projected to September 2007
5
2.7
2.5
2.2
1.6
1.2
0.9
0.7
2001
2002
2003
2004
2005
2006
2007
0
1999
2000
Years
Reserves to PDLs
PDLs to Gross Loans
233%
Firs t Citizens (3)
First Citizens (3)
65%
73%
0%
50%
2.7%
RBTT (2)
32%
SBTT (4)
2.4%
RBL (5)
RBL (5)
RBTT (2)
0.7%
1.3%
SBTT (4)
100%
Source: Company Financials.
(1)
July 2007 annualized
(2)
Year ended in March 2006.
150%
(3)
(4)
(5)
200%
250%
Project to September 2007
29 2006
Year ended October
Year ended September 2006
0.0%
(6)
(7)
(8)
0.5%
1.0%
1.5%
June 2007 annualized
Year ended March 2007
April 2007 annualized
2.0%
2.5%
3.0%
Efficiency
The improvement in the profit position is also as a result of the Group having an
efficiency ratio of 43% as at July 2007 and a projected ratio of 41% as at
September 2007 (which is among the best in the banking sector as a whole).
Efficiency Ratio
80.00%
60%
60.00%
41% 44%
49%
41%
40.00%
20.00%
0.00%
First Citizens 1
Source: Company Financials.
(1)
Projected September 2007.
(1)
Budgeted September 2007
(2)
Quarter ended June 2007
(3)
Year ended in March 2007
(4)
Half year ended April 2007.
RBL2
RBTT 3
30
Scotia 4
The First Citizens Group Consists Of:
• First Citizens Bank Limited
• First Citizens Asset Management Limited
• First Citizens (St. Lucia) Limited
• First Citizens Trustee Services Limited
• First Citizens Securities Trading Limited
• First Citizens Sports Foundation
31
Highest Rated Indigenous Bank In the Region
• First Citizens
BBB+ (Standard & Poor’s)
Baa1 (Moody’s)
• RBL
BBB (Standard & Poor’s)
BBB (Fitch)
• RBTT
BBB - (Fitch)
32
Thank you
33