Caribbean Awards for Excellence 2011: By country

Best Caribbean investment bank

Citi

Citi’s local banks and presence throughout the Caribbean provide it with the relationships and political and regulatory awareness to capitalize on investment-banking opportunities. Citi wins the award for best investment bank in the Caribbean because of its strength in breadth and depth, chalking up impressive deals in countries throughout the region.

Two examples showcase the bank’s ability to execute purely local deals, as well as its ability to adapt international structures to benefit its Caribbean clients. In January, Citi executed a TT$1 billion ($157 million) local debt capital market transaction for a Trinidad-based financial-services company. The proceeds of the bond were in part liability management (optimizing the company’s capital structure by restructuring two of its existing debt issuances into one longer-tenor issue) and provide financing for future growth. The transaction was the largest, longest-dated capital-markets issue for a private-sector company in the domestic market.

In Jamaica, Citi closed a $98 million 10-year door-to-door facility for Jamaica Public Service Company Limited (JPS), benefiting from Nippon Export & Investment Insurance’s (Nexi) Overseas Untied Loan Insurance Program. A challenging Japanese market was cautious to Jamaican country risk, but Citi successfully syndicated the JPS facility by structuring it to benefit partially from Nexi’s 100% political risk coverage (under Nexi’s trade and investment insurance for preventing global warming). Under Nexi’s coverage, general capex financing related to maintenance and loss-reduction projects benefited from 97.5% political risk insurance and 90% catastrophe risk insurance. The financing of a hydroelectric power-plant expansion took advantage of 100% PRI.

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Bahamas

Best bank: Bank of the Bahamas

The Bahamian economy, heavily dependent on tourism, contracted by an estimated 1.5% in 2010 and is still in recession. Bank of the Bahamas wins the award for the country’s best bank for adapting to the hostile economic environment and increasing revenues by 20% in the year to March 31. More important for long-term strength, the bank has built up capital reserves of 20% ($650 million), twice the central bank’s requirement.

Bank of the Bahamas increased its total assets to $824 million, from $780 million the previous year, and increased its loan portfolio, particularly to commercial ventures in the country, which rose by 8.4% in the past 12 months. An example of the bank’s focus on new business within the recession is its financing of a 50,000-square-foot warehouse food store. Bank of the Bahamas is also providing the finance for an entertainment complex that includes restaurants, bowling lanes and other small- and medium-sized businesses. With one quarter to go to the end of its fiscal year, Bank of the Bahamas is on course to record its best-ever annual results.

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Despite challenges to both local and global financial services, HSBC Bank Bermuda maintained a strong and growing balance sheet. The bank reported an annual underlying consolidated net profit of $175 million, an increase of 11%. Return on equity rose to 13.4% from 11.9%.

The bank maintains its focus on personal financial services and private banking. However, its highlight of the past year came from its commercial banking unit, which was selected as sole underwriter for a Bermuda government bond issue and chosen to lead a public-private partnership financing to build the island’s new hospital. HSBC Bermuda’s ability to leverage global capabilities to help it deliver local financing is a daunting challenge to its competitors.

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When, in January 2011, Fitch revised Banco Popular Dominicano’s outlook to positive, it cited the bank’s strong franchise within the Dominican financial system, conservative risk culture, adequate asset quality and profitability.

Banco Popular Dominicano is the bank best positioned to take advantage of the country’s improved operating environment, having already grown rapidly in 2010, posting positive growth statistics across the board at a time when other banks (such as Citi’s Dominican Republic subsidiary) reported negative results. Banco Popular Dominicano’s total assets grew by 11%; its loan portfolio by 17.8%; total deposits increased 10.32%; and net income grew by 13.6% with return on equity growing by 4.7%.

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National Commercial Bank Jamaica is the largest bank in Jamaica, accounting for 39% of the system’s assets at September 2010. Since its privatization in 2002, the bank has been implementing an ambitious business plan to lower its reliance on public-sector finance and to build private-sector business. The poor performance of the Jamaican economy has frustrated the development of revenue growth targets but improvements to the bank’s internal risk-management systems have helped improve efficiency ratios and sustained its profitability. NCBJ’s net income rose by 8%, the highest in the country, as was the bank’s healthy return on equity of 24.8%.

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