FIRST Citizens (FCB) chief executive officer, Karen Darbasie, said yesterday that the bank has “actually recorded a very good capital gain” on its investments in Barita Investment Ltd, a publicly listed Jamaican financial services company.
“We continue to look for more investments, but they (Barita) are investments that were done in the normal course of business to capitalise on potential for gains and or returns so that we could continue to deliver the positive growth in our profits for all of our shareholders,” said Darbasie, at the company’s virtual annual meeting.
First Citizens Investment Services (FCIS), which is a wholly owned subsidiary of FCB, made an initial investment in Barita Investments in September 2020 at the Jamaican company’s Additional Public Offering (APO) of shares.
FCIS acquired 54,280,154 shares in the Barita Investments APO, paying J$52 a share, for a total consideration of about J$2.82 billion (US$19.5 million). That initial investment gave FCIS a five per cent stake in the Jamaican company, which made it the second largest investor in Barita, after Cornerstone Financial Holdings, which is the majority shareholder with about 74 per cent.
Following its initial investment in Barita in September 2020, FCIS acquired a second block of 12 million shares in Barita, taking its shareholding to 66,280,154 shares, or 6.1 per cent of the Jamaican company. FCIS acquired the second block of Barita shares on December 4, 2020, at a price of J$90 a share for a total consideration of approximately J$1.08 billion (US$7.2 million).
Darbasie described the acquisition of the second block of shares as “another opportunity to purchase shares (in Barita) on the Jamaica Stock Exchange (JSE).” Barita closed trading on the JSE yesterday at J$80.04.
In total, FCIS spent about US$27 million (TT$251 million) on the two blocks of shares.
Darbasie was responding yesterday to a question from a FCB shareholder on the amount of money FCIS spent on the investment in Barita as well as the rationale and the strategic intent of the investment. She did not answer the question on the amount of money the bank spent on the acquisitions but assured it was done “in the normal course of FCIS’s business.”
In responding to a question from another shareholder, Darbasie said FCIS will continue to look for investment opportunities around the world that have good yields or the potential for growth.
She said First Citizens is looking to grow its banking assets outside of T&T and “of course, we are doing all of our due diligence on every opportunity that comes to the table for us to ensure that whatever acquisitions we do add positive, accretive value to our shareholders.”
Darbasie also disclosed that FCB was continuing the process of getting approval from regulators in Guyana and T&T to acquire Scotiabank’s operations in the South American member state of Caricom.
FCB shareholders also voted on several resolutions on the restructuring of the bank with the proposed establishment of a holding company that would be owned by the bank’s shareholders in the same amounts as with the bank.
All of those resolutions were approved by an overwhelming majority of the bank’s shareholders