RBTT Caribbean’s largest publicly listed company

Revelling in climbing profits and unprecedented growth over the past 17 years, the RBTT Group is moving to ensure that its increasing influence in the financial life of Trinidad and Tobago and the region does not stumble. Last year’s total revenue grew to $3.5 billion, which meant an increase of $500 million or 16 percent increase over the previous year. Of that $3.5 billion, the gross interest income contributed $2.5 billion or a whopping 70 percent, while the non-interest income provided $1 billion representing an increase of 30 percent.  During the previous year, gross interest income registered 73 percent, while non-interest income reflected 27 percent and according to the Group’s annual report the drop in gross interest income  reflects the Group’s improved performance in fee income generated from foreign exchange, asset management and card-based services.

In showing balance sheet growth, the Group’s total asset base increased to $33.4 billion, an increase of $4.1 billion or 13.8 percent over the previous year. This strong growth was largely attributable to the loans and advances portfolio of $2.4 billion. The asset growth of $4.1 billion was funded primarily by customer’s deposits, which grew significantly by $2.2 billion or 14 percent. Aiding in that growth were interbank borrowings which grew by $560 million and other funding instruments which grew by $508 million. It must be noted that “customers’ deposits and other funding instruments which constitute the Group’s core source of funding, represent 91 percent of all funding.”

RBTT’s highest quality performing asset — its investment portfolio (inclusive of originated securities) grew by 4.2 percent to $10.1 billion up from $9.7 billion in the previous year. “This moderate growth reflects the Group’s asset management strategy to change the asset mix from lower yielding investments to higher yielding loan assets,” stated the report. During the year under review, RBTT realigned its investment in Guardian Holdings Ltd (GHL) by upstreaming its 20 percent investment held in two major subsidiaries, Guardian General Ltd and Guardian Insurance Ltd, to the level of the parent company, GHL. This transaction gave the Group a 15.73 percent stake in GHL.

The Group also acquired an additional 4.27 percent of the outstanding shares of GHL, thereby increasing its shareholding interest in the GHL Group to 20 percent. This transaction enables RBTT to equity account for its investment in the Guardian Group at the holding company level. “The Group,” according to the report, “is committed to maintaining strong capital ratios via internally generated funds, the controlled growth of investments and risk adjusted assets, while simultaneously returning capital to shareholders through dividend payout when appropriate.” So for the year ended March 31, 2004, shareholders’ funds increased by $542 million or 21 percent. The increase was largely attributable to the retention of current year’s profits of $519 million. Total dividend payable for the year is $1 compared to 70 cents for the previous year making the dividend payout ratio 42.6 percent compared to 41.4 percent in 2003. The Group’s target payout ratio is between 40 and 50 percent.

“Return on shareholders’ equity (ROE) increased significantly to 28.3 percent compared to 25.1 percent in 2003. This increase in ROE occurred in spite of the strong growth in the capital base through earnings retention,” the report pointed out. Return to shareholders for the year (which includes both dividend and appreciation in the price of the share) was 114 percent, well above the Trinidad and Tobago Stock Exchange banking industry index which grew by approximately 52 percent.

The market value of the Group’s equity as at March 31 2004, was $15.4 billion, up by 111 percent from $7.3 billion as at March 31, 2003. Based on market capitalisation criterion, RBTT was the largest publicly listed company in the Caribbean as at March 31 2004 using the TTSE index. Bottom line in this entire scenario is that RBTT generated earnings before tax of $974.1 million, which was $281.5 million higher than the previous year. Profit attributable to shareholders was $803.1 million, up 39.3 percent from $576.3 million in the previous year and bringing diluted earnings per share to $2.35 as compared with $1.69 in 2003.