RBTT records half-year pre-tax earnings of US$96 million

Peter J. July, Group Chairman, RBTT Financial Holdings Limited, has announced that the Group recorded pre-tax earnings of US$96 million for the six months ended September 30, 2007, an increase of US$3.2 million or 3% over the corresponding period last year. Profit attributable to shareholders was US$73.4 million, which translates to diluted earnings per share of US$0.214 as compared to US$0.215 in the corresponding period last year.{{more}} The earnings per share performance was affected by a significant increase in taxation expense of US$2.8 million or 15%, due primarily to an increase in taxable income and a decline in tax-exempt investment income.

The Group’s retail business across all markets continued to perform strongly, achieving a 33% increase in pre-tax earnings year over year and contributing to strong growth of 14% in net interest income. In contrast, the trust and asset management business continued to under-perform as the local stock market activity remained depressed and the investment banking business did not achieve the deal targets set for the period.

Overall, profitability improved by 6% in the second quarter, with a profit before tax of US$49.5 million as compared with US$46.5 million in the first quarter.

“The Group companies remain focused on executing their business objectives and the growth trend of the retail and commercial business segment should continue in the last two quarters, contributing to an improvement in earnings over the remaining months of the financial year,” the Chairman said.

On October 2, 2007, the RBTT Board of Directors executed an agreement with Royal Bank of Canada (RBC) to combine the Caribbean retail banking operations of the two banks through the acquisition by RBC of 100% of the share capital of RBTT for a purchase price of TT$13.8 billion (approximately US$2.2 billion). Under this agreement, RBTT shareholders will receive a consideration of TT$40.00 per share payable in a combination of cash (60%) and RBC common shares (40%).

“The transaction, which is subject to the approval of RBTT shareholders and other closing conditions, will provide RBTT with the backing and support of Canada’s largest and most profitable bank and a leading global financial institution, and will underpin the future growth and expansion of the RBTT franchise,” said July. “It will create an extensive banking network, with a presence in 18 countries and more than US$13.7 billion in assets, which will be headquartered in Port of Spain-the base for future expansion within and beyond the Caribbean Basin. We will provide shareholders with full details in an information circular, and a special Shareholders’ Meeting will be convened early in 2008 to seek shareholders’ approval for this very important transaction.”