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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 34 th Annual Conference – Guyana November 13 th , 2007. Trinidad Co-operative Bank (The Penny Bank).

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First Citizens Bank A Success Story

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  1. 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

  2. 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”

  3. 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

  4. 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”

  5. 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.”

  6. 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

  7. 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

  8. 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.”

  9. 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.

  10. 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

  11. 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

  12. 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

  13. 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

  14. Staff Premises Systems Policies and Procedures Consolidation 1993 to 1996

  15. Vision “To become the most competitive financial group in Trinidad and Tobago with a well established international presence”.

  16. 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”.

  17. 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

  18. First Citizens Achievements • 1998 • Green Leaf Award from the EMA, for the Citizens in Action to Restorethe 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

  19. 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

  20. 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

  21. 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

  22. 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.

  23. 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 * Restated

  24. 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 Profit Before Tax (in millions of dollars)

  25. Fourth consecutive year a dividend of $130.0M was paid. Total dividends paid now in excess of $500M. Our Strategies for Service Excellence was launched under the theme ‘first citizens serving First Citizens’ on March 2007. Received the highest accreditation from the International Institute of Internal Auditors Achievements 2006/2007

  26. Cont’d- Achievements 2006/2007 • Completed the successful conversion to Profile Version 6.2. • Implemented a comprehensive range of initiatives to ensure compliance with OSHA requirements. • Best performing Equity Mutual Fund (Immortelle) in 2006 – Trinidad Business Guardian.

  27. Cont’d- Achievements 2006/2007 • 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+

  28. Total Gross Loans The Group has shown consistent loan growth over the last five-year period. Estimated 2007

  29. Asset Quality Indicators Loan Quality PDL/ Total Loans Non Performing Loans 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 15 11.6 8.7 10 % 5 2.7 2.5 2.2 1.6 1.2 0.7 0.9 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 Years Reserves to PDLs PDLs to Gross Loans • Source: Company Financials. • July 2007 annualized • Year ended in March 2006. (3) Project to September 2007 (4) Year ended October 2006 (5) Year ended September 2006 (6) June 2007 annualized (7) Year ended March 2007 (8) April 2007 annualized

  30. Efficiency Ratio 80.00% 60% 60.00% 49% 44% 41% 41% 40.00% 20.00% 0.00% Scotia 4 RBL2 First Citizens 1 RBTT 3 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). • Source: Company Financials. • Projected September 2007. • (1) Budgeted September 2007 • (2) Quarter ended June 2007 • (3) Year ended in March 2007 • (4) Half year ended April 2007.

  31. 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

  32. 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)

  33. Thank you

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