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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Caribbean Investment Holdings Limited | LSE:CIHL | London | Ordinary Share | VGG1991M1032 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 26.50 | 25.00 | 28.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMCIHL
RNS Number : 6169Y
Caribbean Investment Holdings Ltd
22 August 2018
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
CARIBBEAN INVESTMENT HOLDINGS LIMITED ANNOUNCES SIGNIFICANT IMPROVEMENT IN FINANCIAL RESULTS FOR THE FISCAL YEARED MARCH 31, 2018
Belize City, Belize, August 22, 2018 -- Caribbean Investment Holdings Limited (London - AIM: CIHL; Bermuda - CIHL) (the "Company" or "CIHL").
The Company reports that for the financial year ended March 31, 2018 it recorded Net Income of US$20.6 million compared to a Net Loss of US$2.4 million in fiscal 2017. This significant turnaround is a direct result of a US$15.3 million reduction in loan loss provisions at the banking group level, which on consolidation reflects an improvement in the overall asset quality of the Company.
In November 2017, the Caribbean Court of Justice, Belize's final appellate Court, ordered that The Belize Bank Limited ("BBL") was at liberty to enforce an Award of the London Court of International Arbitration against the Government of Belize ("GOB") concerning the recovery of sums due under a 2007 debt owed to BBL. As at March 31, 2018 this judgment debt amounted to US$46.8 million due for collection from the GOB. The Company's expectation is that this debt will be fully settled during the course of the next fiscal year when BBL is expected to be paid in full. The recording of this judgment debt resulted in a reversal of previously existing impairment allowances and contributed US$11.0 million to the Company's net profits.
Commenting on the Company's performance, the Chief Executive Officer, Mr. Lyndon Guiseppi said:
"The Company has made significant progress on the legal front during the course of the year and with the major provisioning for non-performing loans now behind the banking group and an improved operational efficiency, the group is poised to regain market share and to expand its product offering. During the course of fiscal 2019, management will also rekindle its interest in identifying investment opportunities in the financial services sector in the wider Caribbean, as we seek to develop a regional banking franchise."
The Company confirms that the annual report and accounts are now available to view on the Company's website, www.cihltd.co and are today being posted to shareholders.
For further information contact:
Caribbean Investment Holdings Limited
UK +44 (0)207 248 6700 Belize +501 227 7178
Cenkos Securities plc
Nicholas Wells +44 (0)207 397 8920
Note: This and other press releases are available at the Company's web site: http://www.cihltd.co.
Background Information
Caribbean Investment Holdings Limited is a parent holding company with no independent business operations or assets other than its investments in its subsidiaries, intercompany balances and holdings of cash and cash equivalents. CIHL's businesses are conducted through its subsidiaries. The Belize Bank Limited is incorporated and based in Belize and focuses on the provision of financial services and lending to domestic clients. Belize Bank International Limited is incorporated and based in Belize and focuses on the provision of financial services and lending to international clients. CIHL also owns an international corporate services business based in Belize, which operates as Belize Corporate Services Limited. Within Belize, BBL is a full service commercial and retail banking operation with a head office in Belize City and eleven branches extended into each of the six districts of Belize. The principal operations of BBL are commercial lending, consumer lending, deposit taking and related banking activities.
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Caribbean Investment Holdings Limited
Financial Information
Consolidated statements of comprehensive income (in US dollars)
2018 2017
Year ended March 31 Notes $m $m
----------------------------------------------------------------- ------ ------------------ ------------------
Financial Services
Interest income 4 39.7 42.0
Interest expense 5 (5.6) (6.8)
----------------------------------------------------------------- ------ ------------------ ------------------
Net interest income 34.1 35.2
Allowance for loan losses 13 (3.9) (19.2)
----------------------------------------------------------------- ------ ------------------ ------------------
Net interest income after allowance for loan losses 30.2 16.0
Non-interest income 6 21.3 11.1
Non-interest expense 7 (20.0) (22.2)
----------------------------------------------------------------- ------ ------------------ ------------------
Operating income - Financial Services 31.5 4.9
----------------------------------------------------------------- ------ ------------------ ------------------
Corporate
Corporate income 1.3 1.0
Corporate expenses (5.0) (4.4)
----------------------------------------------------------------- ------ ------------------ ------------------
Operating loss - Corporate (3.7) (3.4)
----------------------------------------------------------------- ------ ------------------ ------------------
Net income before tax 27.8 1.5
Taxation (7.2) (3.9)
----------------------------------------------------------------- ------ ------------------ ------------------
Net income (loss) after tax and before other comprehensive income 20.6 (2.4)
Other comprehensive income:
Unrealized losses on securities - (0.1)
----------------------------------------------------------------- ------ ------------------ ------------------
Total comprehensive income (loss) 20.6 (2.5)
Earnings (loss) per ordinary share (basic and diluted) 8 $ 0.21 $ (0.02)
----------------------------------------------------------------- ------ ------------------ ------------------
Consolidated balance sheets (in US dollars)
2018 2017
At March 31 Notes $m $m
-------------------------------------------------- ------ ------------------ ------------------
Assets
Financial Services
Cash and cash equivalents 9 12.8 12.0
Balances with the Central Bank of Belize 10 58.8 121.2
Due from banks (net of allowances) 11 52.1 19.0
Investment securities 12 95.1 46.4
Loans to customers (net of allowances) 13 237.8 268.0
Property, plant and equipment 14 20.2 18.6
Due from Government of Belize (net of allowance) 15 46.7 29.8
Other assets 6.2 10.9
Total Financial Services assets 529.7 525.9
-------------------------------------------------- ------ ------------------ ------------------
Corporate
Cash, cash equivalents, and due from banks 0.4 2.6
Other current assets 0.4 0.6
Total assets 530.5 529.1
-------------------------------------------------- ------ ------------------ ------------------
Liabilities and shareholders' equity
Financial Services
Customer accounts 16 435.0 453.5
Interest payable - 3.4
Other liabilities 12.2 8.8
Total Financial Services liabilities 447.2 465.7
-------------------------------------------------- ------ ------------------ ------------------
Corporate
Current liabilities 7.8 8.2
Total liabilities 455.0 473.9
-------------------------------------------------- ------ ------------------ ------------------
Shareholders' equity:
Share capital (ordinary shares of no par value -
2018 (103,264,000) and 2017 (103,642,984) 18 0.5 0.6
Additional paid-in capital 52.8 52.8
Treasury shares 18 (21.7) (21.7)
Retained earnings 43.9 23.5
Total shareholders' equity 75.5 55.2
-------------------------------------------------- ------ ------------------ ------------------
Total liabilities and shareholders' equity 530.5 529.1
-------------------------------------------------- ------ ------------------ ------------------
Consolidated statements of cash flows (in US dollars)
2018 2017
Year ended March 31 $m $m
---------------------------------------------------------------- ------------------ ------------------
Cash flows from operating activities
Net income (loss) from operations 20.6 (2.4)
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation 2.0 1.6
Allowance for loan losses 3.9 19.2
Changes in assets and liabilities:
Decrease in interest payable (3.4) (0.4)
Increase in Government of Belize Receivable (16.9) (4.6)
Decrease in other and current assets 4.9 6.4
Increase in other and current liabilities 3.0 2.1
Net cash provided by operating activities 14.1 21.9
---------------------------------------------------------------- ------------------ ------------------
Cash flows from investing activities
Purchase of property, plant and equipment (net of disposals) (3.6) (3.9)
Increase in investment securities (48.7) (34.6)
Decrease in loans (net of charge-offs) to customers 26.3 1.5
Net cash utilized by investing activities (26.0) (37.0)
---------------------------------------------------------------- ------------------ ------------------
Cash flows from financing activities
Decrease in deposits (18.5) (22.0)
Acquisition of shares (0.1) -
Dividends (0.1) -
Unrealized losses on securities (0.1) (0.1)
Net cash utilized by financing activities (18.8) (22.1)
---------------------------------------------------------------- ------------------ ------------------
Net change in cash, cash equivalents and due from banks (30.7) (37.2)
Cash, cash equivalents and due from banks at beginning of year 154.8 192.0
Cash, cash equivalents and due from banks at end of year 124.1 154.8
---------------------------------------------------------------- ------------------ ------------------
Cash and cash equivalents - financial services 12.8 12.0
Balances with Central Bank of Belize - financial services 58.8 121.2
Due from banks (net of allowances) - financial services 52.1 19.0
Cash, cash equivalents and due from banks - corporate 0.4 2.6
124.1 154.8
---------------------------------------------------------------- ------------------ ------------------
Extracts from Notes to the Financial Statements
Note 4 - Interest income
2018 2017
Year ended March 31 $m $m
--------------------------------------------- ---------------- ----------------
Interest on loans to customers 31.5 34.6
Interest on Government of Belize receivable 6.1 6.1
Interest on securities 2.1 1.3
39.7 42.0
--------------------------------------------- ---------------- ----------------
Note 5 - Interest expense
2018 2017
Year ended March 31 $m $m
------------------------------- ---------------- ----------------
Interest on customer deposits 5.6 6.8
5.6 6.8
------------------------------- ---------------- ----------------
Note 6 - Non-interest income
2018 2017
Year ended March 31 $m $m
-------------------------------------------------------------------- ---------------- -----------------
Foreign exchange income and
commissions 2.9 2.9
Customer service and letter of
credit fees 1.7 1.5
Credit card fees 4.1 4.7
Other financial and related
services 1.3 1.5
Reduction in impairment allowance on due from Government of Belize 11.0 -
Other income 0.3 0.5
21.3 11.1
-------------------------------------------------------------------- ---------------- -----------------
Note 7 - Non-interest expense
2018 2017
Year ended March 31 $m $m
------------------------ ---------------- ----------------
Salaries and benefits 9.4 9.3
Premises and equipment 4.3 3.6
Other expenses 6.3 9.3
20.0 22.2
------------------------ ---------------- ----------------
Note 8 - Earnings per ordinary share
Basic and diluted earnings per ordinary share have been calculated on the net income attributable to ordinary shareholders and the weighted average number of ordinary shares in issue (net of treasury shares) in each year.
2018 2017
Year ended March 31 $m $m
----------------------------------- ---------------------- ------------------------
Net income (loss) 20.6 (2.4)
----------------------------------- ---------------------- ------------------------
Weighted average number of
shares (basic and diluted) 99,520,017 99,899,001
----------------------------------- ---------------------- ------------------------
Basic and diluted earnings (loss)
per ordinary share $ 0.21 $ (0.02)
----------------------------------- ---------------------- ------------------------
During the year ended March 31, 2018 and 2017 the weighted average effect of share options has been excluded from the calculation of diluted earnings per ordinary share, since they were anti-dilutive under the treasury stock method of earnings per share calculation (note 20).
Note 9 - Cash and cash equivalents
2018 2017
At March 31 $m $m
------------------------------------- -------------------- --------------------
Cash in hand 9.4 9.6
Amounts in the course of collection 3.4 2.4
12.8 12.0
------------------------------------- -------------------- --------------------
Currency, liquidity, and interest rates risks analyses of cash and cash equivalents are disclosed in Note 23.
Note 10 - Balances with the Central Bank of Belize
2018 2017
At March 31 $m $m
---------------------------- ------------------- -------------------
Statutory reserve balances 34.2 34.6
Operating balance 24.6 86.6
58.8 121.2
---------------------------- ------------------- -------------------
BBL is required to maintain an average minimum non-interest bearing deposit balance with the Central Bank of Belize equal to 8.5 percent of the average deposit liabilities of BBL. At March 31, 2018, the actual amount was 13.5 percent. In addition, BBL must maintain an average aggregate of approved liquid assets (which include the average minimum non-interest bearing deposit balance maintained with the Central Bank of Belize) equal to 23 percent of the average deposit liabilities of BBL. At March 31, 2018, the actual amount was 28.9 percent. The statutory reserve balances are not readily available to finance the day to day operations of the banks.
Note 11 - Due from banks (net of allowances)
2018 2017
At March 31 $m $m
----------------------------------- -------------------- --------------------
Due from banks 52.3 19.3
Less: impairment allowance on due
from banks (0.2) (0.3)
-------------------- --------------------
52.1 19.0
----------------------------------- -------------------- --------------------
The portfolio of balances held by both BBL and BBIL represents instruments of short-term placements of temporary available cash.
As at March 31, 2018 and 2017, all the interbank loans and deposits placed in other banks were current and not impaired except for balances held with Worldclear Limited, amounting to $0.2 million, which had a related impairment allowance of $0.2 million.
Movements in impairment allowance on due from banks were as follows:
2018 2017
At March 31 $m $m
------------------------------------ -------------------- ---------------------
At the beginning of the year (0.3) -
Charge during the year - (0.3)
Balances recovered during the year 0.1 -
-------------------- ---------------------
(0.2) (0.3)
------------------------------------ -------------------- ---------------------
Currency, liquidity, and interest rate risk analyses of cash and cash equivalents are disclosed in Note 23.
BBL has utilized $4.2 million (2017 - $4.2 million) of its balances held with other financial institutions to be held as collateral for certain credit lines. These particular financial assets are pledged as collateral under terms that are usual and customary for such transactions.
Note 12 - Investment securities
2018 2017
At March 31 $m $m
------------------------------- --------------- -----------------
Securities available for sale 14.4 8.9
Securities held to maturity 80.7 37.5
95.1 46.4
------------------------------- --------------- -----------------
The fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:
Gross Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
At March 31, 2018 $m $m $m $m
------------------------ ---------------- ------------------ ------------------ -------------
Government sponsored
entities and agencies 0.3 - - 0.3
Corporate bonds 14.1 - (0.1) 14.0
14.4 - (0.1) 14.3
------------------------ ---------------- ------------------ ------------------ -------------
Gross Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
At March 31, 2017 $m $m $m $m
------------------------ ---------------- ------------------ ------------------ -------------
Government sponsored
entities and agencies 3.4 - (0.1) 3.3
Corporate bonds 5.6 - - 5.6
9.0 - (0.1) 8.9
------------------------ ---------------- ------------------ ------------------ -------------
A summary of securities as of March 31, 2018, by contractual maturity, is presented below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
2018 2017
At March 31 $m $m
---------------------------- ---------------- -----------------
Due in one year or less 56.9 30.2
Due in one to five years 29.6 11.9
Due from five to ten years 7.4 2.8
Due after ten years 1.2 1.5
95.1 46.4
---------------------------- ---------------- -----------------
Management has the positive intent and ability to hold the securities classified as held to maturity to their respective maturities, so they are carried at amortized cost which approximates market value.
Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.
Note 13 - Loans to customers (net of allowances)
2018 2017
At March 31 $m $m
------------------------------------- ---------------- --------------
Loans (net of unearned income):
Residential mortgage 43.4 41.8
Credit card 9.3 9.0
Other consumer 50.5 45.2
Commercial - real estate 50.5 58.4
Commercial - other 104.2 145.1
257.9 299.5
------------------------------------- ---------------- --------------
Allowance for loan losses:
Residential mortgage (3.9) (3.5)
Credit card (0.3) (0.3)
Other consumer (1.9) (1.5)
Commercial - real estate (2.4) (8.4)
Commercial - other (11.6) (17.8)
(20.1) (31.5)
------------------------------------- ---------------- --------------
Loans (net of unearned income
and allowance for loan losses):
Residential mortgage 39.5 38.3
Credit card 9.0 8.7
Other consumer 48.6 43.7
Commercial - real estate 48.1 50.0
Commercial - other 92.6 127.3
------------------------------------- ---------------- --------------
Loans (net of unearned income
and allowance for loan losses): 237.8 268.0
------------------------------------- ---------------- --------------
The maturity range of loans outstanding is shown in the table below. All loans, other than consumer loans, are legally repayable on demand; however, they are disclosed below as if they run to their full maturity.
Due after one
Due in one year through Due after
year or less five years five years Total
At March 31, 2018 $m $m $m $m
---------------------- ------------------ --------------------- --------------- ---------
Residential mortgage 0.2 6.2 37.0 43.4
Credit card 9.2 0.1 - 9.3
Other consumer 6.8 35.9 7.8 50.5
Commercial - real
estate 3.6 17.1 29.8 50.5
Commercial - other 26.7 17.3 60.2 104.2
46.5 76.6 134.8 257.9
---------------------- ------------------ --------------------- --------------- ---------
Due after one
Due in one year through Due after
year or less five years five years Total
At March 31, 2017 $m $m $m $m
---------------------- ------------------ --------------------- --------------- ---------
Residential mortgage 0.3 6.0 35.5 41.8
Credit card 8.8 0.1 0.1 9.0
Other consumer 6.6 32.6 6.0 45.2
Commercial - real
estate 5.1 19.8 33.5 58.4
Commercial - other 34.4 18.6 92.1 145.1
55.2 77.1 167.2 299.5
---------------------- ------------------ --------------------- --------------- ---------
The table below reflects outstanding loans by industry classifications.
2018 2017
At March 31 Amount % Amount %
--------------------------- ---------------- ------- ---------------- -------
Real estate 69.5 26.9% 78.6 26.2%
Other consumer loans 50.5 19.6% 45.2 15.1%
Building and construction 32.9 12.8% 36.2 12.1%
Distribution 20.1 7.8% 23.3 7.8%
Agriculture 19.5 7.6% 48.6 16.2%
Transportation 15.2 5.9% 15.7 5.2%
Tourism 14.8 5.7% 16.7 5.6%
Marine Products 11.2 4.3% 12.6 4.2%
Credit card 9.3 3.6% 9.0 3.0%
Professional services 6.7 2.6% 4.3 1.4%
Utilities 5.5 2.1% 5.2 1.7%
Manufacturing 1.9 0.7% 1.5 0.5%
Government 0.5 0.2% 1.2 0.4%
Entertainment 0.2 0.1% 0.2 0.1%
Mining and exploration 0.1 0.0% 0.8 0.3%
Forestry - 0.0% 0.3 0.1%
Financial institutions - 0.0% 0.1 0.0%
Total loans 257.9 100.0% 299.5 100.0%
--------------------------- ---------------- ------- ---------------- -------
The Group categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Group analyses loans individually by classifying the loans as to credit risk. This analysis is performed on a monthly basis. The Group uses the following definitions for risk ratings:
Special Mention: Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.
Substandard: Loans classified as substandard are those loans that are over three and up to six months in arrears or overdraft accounts where interest charges have not been covered by deposits for three to less than six months.
Doubtful: Loans classified as doubtful are those loans that are over six and up to twelve months in arrears or overdraft accounts where interest charges have not been covered by deposits for six to less than twelve months.
Loss: Loans classified as loss are those loans that are over twelve months in arrears or overdraft accounts where interest charges have not been covered by deposits for twelve months or more.
Loans not meeting the criteria above that are analysed individually as part of the above described process are considered to be Pass loans.
Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
Sub -
Pass Standard Doubtful Loss Total
At March 31, 2018 $m $m $m $m $m
-------------------------- ------------- -------------- ------------- -------------- -------------
Residential mortgage 37.5 - 1.8 4.1 43.4
Credit card 9.1 0.1 0.1 - 9.3
Other consumer 48.7 0.4 0.6 0.8 50.5
Commercial - real estate 45.9 2.6 0.1 1.9 50.5
Commercial - other 92.2 1.4 0.6 10.0 104.2
233.4 4.5 3.2 16.8 257.9
-------------------------- ------------- -------------- ------------- -------------- -------------
Sub -
Pass Standard Doubtful Loss Total
At March 31, 2017 $m $m $m $m $m
-------------------------- ------------- -------------- ------------- ------------- -------------
Residential mortgage 36.8 0.4 0.1 4.5 41.8
Credit card 8.7 0.1 0.1 0.1 9.0
Other consumer 43.5 0.6 0.2 0.9 45.2
Commercial - real estate 51.8 - 0.8 5.8 58.4
Commercial - other 128.2 9.4 1.6 5.9 145.1
269.0 10.5 2.8 17.2 299.5
-------------------------- ------------- -------------- ------------- ------------- -------------
Individually impaired loans with allocated allowances were as follows:
2018 2017
At March 31 $m $m
---------------------------------- ------------------ ---------------------
Non-accrual loans as at year end 24.5 30.3
Other performing loans classified
as impaired - 29.6
Less: impairment allowance on
loans to customers (20.1) (31.5)
At the end of the year 4.4 28.4
---------------------------------- ------------------ ---------------------
The Group considers all non-accrual loans as individually classified impaired loans.
The following table presents the recorded investment in non-accrual by class of loans:
2018 2017
At March 31 $m $m
-------------------------- ------------------ ---------------------
Residential mortgage 5.9 4.9
Credit card 0.2 0.3
Other consumer 1.8 1.7
Commercial - real estate 4.6 6.6
Commercial - other 12.0 16.8
24.5 30.3
-------------------------- ------------------ ---------------------
The interest income which would have been recorded during the year ended March 31, 2018 had all non-accrual loans been current in accordance with their terms was approximately $5.9 million (2017 - $16.7 million).
All non-accrual loans are considered as individually impaired loans.
As a result of the nature of these financial instruments, the estimated fair market value of the loan portfolio is considered by the Group to approximate its carrying value. Loan loss provisioning is based on management's estimate of the recoverability of non-performing loans after allowing for the estimated net realizable value of collateral held.
At March 31, 2018, the Group had total loans outstanding to certain officers and employees of $9.7 million (2017 - $8.8 million) at preferential rates of interest varying between 0.0 percent and 12.0 percent per annum, repayable over varying periods not exceeding 25 years. At March 31, 2018, these loans included nil (2017 - nil) classified within commercial - other loans. The transfer value loss on these loans had not been considered material and therefore had not been included in these financial statements.
Changes in the allowance for loan losses were as follows:
2018 2017
Year ended March 31 $m $m
------------------------------ ---------------- -------------
At the beginning of year 31.5 52.9
Impairment allowance charged
during the year 3.9 19.2
Charge-offs (15.3) (40.6)
------------------------------ ---------------- -------------
Net movement in the year (11.4) (21.4)
------------------------------ ---------------- -------------
At end of the year 20.1 31.5
------------------------------ ---------------- -------------
Note 14 - Property, plant and equipment
2018 2017
At March 31 $m $m
------------------------------- -------------------- --------------------
Cost:
Land 1.5 1.2
Buildings 15.7 15.3
Furniture and fixtures and
other equipment 6.8 6.0
Computer and office equipment 9.4 8.4
Motor vehicles 2.1 2.2
------------------------------- -------------------- --------------------
Total cost 35.5 33.1
Less: total accumulated
depreciation (15.3) (14.5)
20.2 18.6
------------------------------- -------------------- --------------------
Total capital expenditures for the year ended March 31, 2018 was $3.6 million (2017 - $4.3 million). Total depreciation expense for the year ended March 31, 2018 was $2.0 million (2017 - $1.6 million).
For the purpose of impairment testing for the year ended March 31, 2018, the Group's management has combined all the subsidiaries into one reporting unit. As a result no impairment was determined as at March 31, 2018.
As at March 31, 2018 the Group's buildings, vehicles, ATMs and other equipment were insured for $22.6 million. (2017 - $23.9 million)
As at March 31, 2018 historical cost of fully depreciated fixed assets amounted to $6.9 million (2017 - $6.2 million). They are recognized in the consolidated balance sheets at zero residual value.
Note 15 - Due from Government of Belize (net of allowance)
2018 2017
At March 31 $m $m
----------------------------- -------------------- -------------------
Amounts receivable from GOB
arbitration award 46.8 40.8
Less: Impairment allowance (0.1) (11.0)
46.7 29.8
----------------------------- -------------------- -------------------
Movements in impairment allowance on due from Government of Belize.
2018 2017
At March 31 $m $m
--------------------------- -------------------- --------------------
At beginning of the year (11.0) (19.8)
Charge during the year (0.1) (1.6)
Reduction during the year 11.0 10.4
At the end of the year (0.1) (11.0)
--------------------------- -------------------- --------------------
On 23 March 2007, a loan note was issued to the BBL by the GOB under the terms of a settlement deed entered into by BBL and the GOB on the same date (the "2007 Loan Note"). The 2007 Loan Note had been entered into by the GOB in order to satisfy the GOB's liability under a 2004 guarantee for debts and liabilities owed to BBL by Universal Health Services.
While BBL had initially recorded the receivable owed by the GOB under the 2007 Loan Note, the Central Bank of Belize directed BBL to remove this receivable from BBL's accounts; this exclusion resulted in the auditor issuing a qualified opinion on BBL's financial statements for the fiscal year ended 31 March, 2012.
BBL also commenced arbitration proceedings (the "Arbitration") under the London Court of International Arbitration (the "LCIA") in order to recover the sums due under the 2007 Loan Note. On 15 January 2013 the arbitral tribunal made its Final Award in the Arbitration in favour of BBL. It declared that the 2007 Loan Note was valid and binding and ordered the GOB to pay BBL the sum of BZD 36,895,509 plus interest and costs.
The LCIA Final Award confirmed that the 2007 Loan Note was valid and binding on the basis of a judgement given by the Privy Council, which was at that time Belize's highest court of appeal, in The Belize Bank Limited v The Association of Concerned Belizeans and Others. In this judgement, the Privy Council rejected a challenge to the Loan Note that it did not comply with the Belize Finance and Audit (Reform) Act.
In order to increase its enforcement options, BBL applied to the English High Court for an order that the Final Award be enforceable in the same manner as a judgement or order of an English Court to the same effect. That order was granted on 20 February 2013 and it was served on the GOB on 15 May 2013 (the "English Judgement").
Award Enforcement proceedings were also commenced against GOB in the Belize Supreme Court in 2013. On 17 February 2015, the Belize Supreme Court refused to enforce the Final Award on the grounds that enforcement would be contrary to public policy. BBL appealed this decision to the Belize Court of Appeal and on 24 March 2017, the Court of Appeal upheld the decision of the Belize Supreme Court.
BBL appealed the Court of Appeal's decision to the Caribbean Court of Justice (the "CCJ") and on 22 November 2017, the CCJ reversed the Court of Appeal's decision and found in favour of BBL. The CCJ's Order granted permission to BBL to enforce the LCIA Award in the same manner as a judgement or order of the Supreme Court to the same effect (the "Belize Judgement"). Twenty-one days after the CCJ granted permission, BBL applied to the CCJ under section 25 of the Crown Proceedings Act for a certificate certifying the amounts payable to BBL by the Government. On 3 January 2018 the CCJ issued the Certificate certifying the amount payable to BBL by the Government under the LCIA Award and the Certificate was served on the Attorney General, the Minister of Finance and the Financial Secretary on 4 January 2018. The CCJ held that the effect of the Certificate is to convert the CCJ Order into a Judgement Debt.
On 4 January 2018 BBL applied for a further order from the CCJ directing the Minister of Finance to pay the amount due under the Judgement. On 1 June 2018 the CCJ decided that BBL's application was premature but stated in its decision that if the Government failed to enact the necessary legislation to satisfy the judgement, then BBL should apply to the Belize Supreme Court for a declaration that the Minister of Finance has failed to comply with his obligations under section 25 of the Crown Proceedings Act and an order that the Minister of Finance pay the amount due under the judgement.
On 26 June 2018, BBL filed an application pursuant to Part 56 of the Supreme Court (Civil Procedure) Rules, 2005 for an order granting permission to BBL to apply for Judicial Review of: (i) the decision of the Minister of Finance not to comply with his mandatory duty within section 25(3) of the Crown Proceedings Act to pay the sum certified as payable to BBL by the Certificate of Order dated 3 January 2018 issued by the Registrar of the Caribbean Court of Justice, and (ii) the decision of the Minister of Finance not to satisfy the Judgement Debt with interest accruing at the rate of 6% per annum.
On 9 July 2018 the Chief Justice granted permission to BBL to apply for judicial review. BBL filed a fixed date claim form applying for judicial review on 23 July 2018. The first hearing will take place on 17 September 2018.
In order to further increase its enforcement options, BBL filed a petition to enforce the Final Award in federal court in the United States on 18 April 2014. The GOB filed a motion to dismiss and a response to the petition to confirm the Final Award on 8 August 2014. The GOB applied for a stay pending the outcome of similar litigation. However, the stay was denied on 9 January 2016. On 8 June 2016 the US District Court confirmed the Final Award and entered judgement in favour of BBL against the GOB for the monetary portion of the Award; to be converted to US dollars, applying the conversion rate as of the date the Award was issued plus interest at the annual rate of 17.0% compounded annually between 8 September 2012 and 8 June 2016. On 12 July 2016, the United States District Court ordered that judgement be entered in favour of BBL against the GOB in the amount of USD 19,086,210 plus USD 16,099,216 in pre-judgement interest, totalling USD 35,185,427 (the "US Judgement").
The GOB appealed the decision of the US District Court to the US Court of Appeals, D.C. Circuit. A hearing in the US Court of Appeals took place on 9 February 2017. On 31 March 2017, the US Court of Appeals, D.C. Circuit upheld the decision of the US District Court and rejected all of the GOB's arguments on appeal.
On 28 April 2017, the GOB filed a petition for an 'en banc' review of the US Court of Appeal's decision in essence asking the court to reconsider its decision. On 7 June 2017, the petition by the GOB for an 'en banc' rehearing was denied by the US Court of Appeal and its earlier judgement was confirmed.
The GOB then sought review by the United States Supreme Court. On 13 November 2017, the United States Supreme Court denied the GOB's petition for certiorari, rendering the US Judgement final and not subject to further judicial review.
On 16 November 2017 BBL filed a motion in the United States District Court for the District of Columbia pursuant to 28 U.S.C. --1610(c) seeking judicial authorisation to seek enforcement of the US Judgement against the GOB. On March 12, 2018, the United States District Court ordered that the Bank may now seek attachment or execution of Government of Belize property to satisfy the Court's judgement pursuant to 28 U.S.C. -- 1610(a)-(b) in the jurisdictions where such attachment or execution is appropriate.
The Award underlying the English Judgement, the US Judgement, and the Belize Judgement has been recognised and declared enforceable against GOB by the highest Belize and US Courts, and by the English Courts.
Note 16 - Customer accounts
2018 2017
At March 31 $m $m
------------------ ------------- --------------
Term deposits 192.9 214.0
Demand deposits 163.1 166.2
Savings deposits 79.0 73.3
435.0 453.5
------------------ ------------- --------------
The maturity distribution of certificates of deposit of $0.1 million or more was as follows:
2018 2017
At March 31 $m $m
--------------------------------- ------------- --------------
3 months or less 32.3 38.7
Over 3 and to 6 months 29.6 38.7
Over 6 and to 12 months 69.8 80.3
Over 12 months 23.0 17.2
Deposits less than $0.1 million 38.2 39.1
192.9 214.0
--------------------------------- ------------- --------------
Included in certificates of deposit at March 31, 2018 were $8.7 million (2017 - $12.7 million) of certificates of deposit denominated in US dollars and nil (2017 - nil) denominated in UK pounds sterling. Included in demand deposits at March 31, 2018 were $18.8 million (2017 - $20.6 million) of demand deposits denominated in US dollars and $0.2 million (2017 - $0.2 million) denominated in UK pounds sterling.
As a result of the short-term maturity of these financial instruments, their carrying value is considered by the Group to approximately equal their fair market value.
Note 18 - Share capital
2018 2017
At March 31 $m $m
------------------------------------ --------------------- -----------------
Authorized
Ordinary shares:
200,000,000 shares of no
par value 2.0 2.0
Preference shares:
14,000,000 shares of $1.00 each 14.0 14.0
Total authorized 16.0 16.0
-------------------------------------- --------------------- -----------------
Issued and outstanding
Ordinary shares:
103,264,000 shares of no
par value (2017 - 103,642,984) 0.5 0.6
-------------------------------------- --------------------- -----------------
During the year ended March 31, 2018, the Company acquired 378,984 ordinary shares In the Company at a price of 11.50 pence per share. Immediately following the acquisition of the shares, the 378,984 shares were cancelled.
Treasury Shares
During the two years ended March 31, 2018 and 2017, there has been no movement in treasury shares.
Number $m
------------------- ---------------- ----------------
At March 31, 2017 3,743,983 21.7
--------------------- ---------------- ----------------
At March 31, 2018 3,743,983 21.7
--------------------- ---------------- ----------------
Share Options
Caribbean Investment has granted employee share options which are issued under its share option plan which reserves ordinary shares for issuance to the Company's executives, officers and key employees. The options have been granted under the Long-Term Incentive Plans (the "Incentive Plans"). The Incentive Plans are administrated by a committee of the board of directors of Caribbean Investment. Options are generally granted to purchase Caribbean Investment ordinary shares at prices which equate to or are above the market price of the ordinary shares on the date the option is granted. Conditions of vesting are determined at the time of grant but options are generally vested and become exercisable for a period of between three and ten years from the date of grant and all have a maximum term of ten years.
Weighted
Number average
of share exercise
options price
------------------------------- ---------------- ---------
Outstanding at March 31, 2017 7,250,000 $1.95
--------------------------------- ---------------- ---------
Outstanding at March 31, 2018 7,250,000 $1.95
--------------------------------- ---------------- ---------
During the year ended March 31, 2018, no outstanding options were exercised.
In August 2008, Caribbean Investment granted options over 7,000,000 ordinary shares at an exercise price of $6.50 per share which vest and are exercisable in three equal instalments on August 1, 2012, August 1, 2013 and August 1, 2014.
The term of these options extend to August 1, 2019.
In May 2009, Caribbean Investment granted options over a further 250,000 ordinary shares at the exercise price of $6.50 per share which vest and are exercisable in three instalments on June 1, 2013, June 1, 2014 and June 1, 2015. The term of these options extend to June 1, 2020.
The exercise price of these options was adjusted to $1.95 following the demerger of Waterloo Investment Holdings Limited from the Group in 2011.
The Group measures compensation cost in connection with share option plans and schemes using a fair value based method. Using the fair value based method, the Group took a charge of nil in the consolidated statement of comprehensive income during the year ended March 31, 2018 (2017 - nil).
The fair value of each option grant in 2008 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:
Expected stock price volatility 30 percent Risk free interest rate 3.7 percent Expected dividend yield Nil percent Expected life of option 7.0 years
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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