HIGHLIGHTS
RFHL HY2025
- Earnings: Diluted Earnings Per Share up 1.1% to $6.13 from $6.20
- Performance Drivers:
- Increased Net Interest Income
- Outlook:
- Geographical Diversification
- Rating: Maintained at OVERWEIGHT
FCGFH HY2025
- Earnings: Earnings Per Share increased 2.3% from $1.73 to $1.77
- Performance Drivers:
- Modest Revenue Growth
- Outlook:
- Increased Economic Activity
- Rating: Maintained at OVERWEIGHT
This week, we at Bourse review the performance of two key members of the local Banking Sector, Republic Financial Holdings Limited (RFHL) and First Citizens Group Financial Holdings Limited (FCGFH) for the six-month period (HY2025) ended March 31st, 2025. Both RFHL and FCGFH reported modest earnings growth, reflecting generally improving conditions. Can both banks continue their positive momentum in the upcoming months? We discuss below.
Republic Financial Holdings Limited (RFHL)
RFHL reported a Diluted Earnings Per Share (EPS) of $6.20 for the six months ended 31st March 2025 (HY2025), a 1.1% increase when compared to the EPS of $6.13 recorded in the previous comparable period.
Net Interest Income grew 6.4% to $2.66B from the previous $2.50B, due to an increase loan advance. Other Income grew 9.3% and stood at $1.06B in HY2025, relative to $971M in HY2024. Consequently, Operating Income increased to $3.72B, an improvement of 7.2%. Operating Expenses grew by 7.0% from $1.88B in HY2024 to $2.01B in HY2025. Resultantly, RFHL’s Operating Profit for the period amounted to $1.72B relative to $1.60B in HY2024, up 7.5%. Credit Loss Expense increased 38.3% from $115M in HY2024 to $159M in HY2025. Profit Before Taxation (PBT) climbed to $1.55B in HY2025, 6.5% higher than $1.46B in the previous fiscal year (HY2024). Taxation Expense was 20.9% up, with the effective taxation rate moving from 22.4% in HY2024 to 25.4% in HY2025. Overall, RFHL’s Net Profit attributable to Equity Holders amounted to $1.01B, 1.2% higher than $1.00B reported in the prior comparable period.
Revenue Growth Continues
RFHL’s Operating Income rose 7.2% in HY2025, marking the sixth (6) consecutive period of growth. This performance was driven by year-on-year improvements across most geographic segments, including Barbados (↑29.3%), Suriname (↑38.9%), Eastern Caribbean (↑0.9%), Guyana (↑14.6%), Ghana (↑2.5%) and Cayman Islands (↑2.0%) operations. Trinidad and Tobago, despite being a key segment, saw a 16.8% decline.
Net Interest Income (71.5% of Operating Income) rose 6.4% from $2.50B to $2.66B, supported by strong loan demand, reflected in an 11.7% increase in Loans and Advances to $71.4B. Meanwhile, Other Income (28.5% of Operating Income) grew 9.3%, from a prior $971M to $1.06M.
PBT Grows
RFHL reported a 6.5% increase in Profit Before Tax (PBT), reaching $1.55B for the period, with four of its eight operating territories posting year-on-year growth.
Despite this overall improvement, RFHL’s main operating jurisdiction Trinidad and Tobago (91.7% of PBT including eliminations) declined 28.5% year-on-year to $1.42B from a previous $1.99B. Guyana, the second largest contributor to PBT (14.8%) advanced 26.6% from $177M to $224M in HY2025. The Eastern Caribbean (14.4% of PBT) experienced a 50.7% decrease in PBT YoY to $68M from $138M in the prior quarter. Barbados (14.4% of PBT) recorded an increase in PBT of 64.7% to $224M in HY2025. The Cayman Islands fell 2.1% from $235M to $230M in HY2025. Ghana advanced 10.3% from $78M in HY2024 to $86M. Suriname improved 67.3% in the current reporting period and British Virgin Islands (BVI) dropped 2.3% YoY, recording a PBT of $43M.
The Bourse View
At a current price of $110.65, RFHL trades at a trailing P/E of 9.0 times, below the Banking Sector average of 9.7 times. The stock offers investors a trailing dividend yield of 5.2%, above the sector average of 4.7%. The company announced an interim dividend of $0.60 payable on May 29th, 2025, to shareholders on record by May 14th, 2025.
Despite ongoing global uncertainty and market volatility, RFHL’s blend of earnings performance, dividend payouts, and current valuation presents a compelling value proposition for investors from both capital appreciation and income perspective. On the basis of geographical diversification of operations, modest earnings and attractive valuations, Bourse maintains an OVERWEIGHT rating on RFHL.
First Citizens Group Financial Holdings Limited (FCGFH)
First Citizens Group Financial Holdings Limited (FCGFH) recorded Earnings per Share (EPS) of $1.77 for the six months ended 31st March 2025 (HY2025), up 2.3%, relative to $1.73 reported in the prior comparable period (HY2024).
Net Interest Income rose 2.2% from $1.0B in HY2024 to $1.03B in the current period, underpinned by growth in its Loans to Customers Portfolio. Other income increased 8.5%, amounting to $361.5M. Overall, Total Net Revenue was 3.8% higher, standing at $1.39B in HY2025, relative to $1.34B in the previous period. A credit impairment loss of $25.0M was reported compared to $3.3M in HY2024. Expenses fell marginally from $748.3M in HY2025 to $745.9M. Operating Profit increased 5.3%, moving from $588.5M to $619.4M in HY2025. Share of Profit from Associates and Joint Ventures contracted 8.5% to $12.6M in a period under review from a prior $13.8M. Profit Before Taxation climbed 4.9% to $632.0M from a prior $602.3M. Taxation expense stood at $187.2M in HY2025, 12.5% higher than $166.4M in HY2024 with the Group’s effective taxation rate moving from 27.6% to 29.6%. Overall, Profit After Taxation rose 2.1% from $435.8M in HY2024 to $444.8M in HY2025.
Segment Performance Lower
FCGFH reported a 3.3% year-on-year decline in segment Profit Before Taxation (PBT), excluding eliminations. Retail & Corporate Banking, the largest contributor to PBT, made up 65.1% of the total (before eliminations), increased 1.3% from $523M to $530M. Treasury & Investment Banking, the second-largest contributor with 32% of PBT (before eliminations), saw a 10.9% decline year-on-year, falling to $258M. The Trustee & Asset Management segment, 3.2% of PBT (before eliminations), dropped 11.6% in HY2025 to $26M.
Credit Impairment Losses
The Group achieved a 6.7% year-on-year growth in Loans to Customers, growing from $21.1B to $22.5B in HY2025. Meanwhile, credit impairment losses totalled $0.03M (approximately 0.1% of Total Loans), reflecting prudent lending standards and a stable credit environment.
FCGFH’s total assets grew by 6.6% year-on-year, increasing from $45.5B in HY2024 to $48.5B in HY2025. Loans to Customers, which make up 46.4% of Total Assets, rose 6.7%, reaching $22.5B. Investments, accounting for 33.2% of Total Assets, totalled $16.1B, advancing 29.5% compared to the prior period. Cash and Statutory Deposits, representing 16.0% of Total Assets, fell to $7.7B. As it pertains to balance sheet trends, FCGFH has been prioritizing asset acquisitions in its loan portfolios while also increasing its investment holdings.
The Bourse View
FCGFH is currently priced at $42.58 and trades at a P/E ratio of 11.1 times, above the Banking Sector average of 9.7 times. The Group declared an interim dividend of $0.54 per share payable on May 29th, 2025, to shareholders on record by May 16th, 2025. The stock offers investors an attractive dividend yield of 5.8%, well above the sector average of 4.7%. FCGFH continues to offer quarterly dividends in line with the Group’s policy, which should attract income-focused investors. On the basis of improving earnings growth and attractive dividends, Bourse maintains an OVERWEIGHT rating on FCGFH.
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