JIS News

The Financial Institutions Services (FIS) Limited realised a net profit of $253 million for the 2004/05 fiscal year, compared to a net loss of $54 million for the previous year.
The significant turnaround was due to a $264 million or 333 per cent increase in interest income, as well as lower operations and administration costs, which fell by $66 million or 40 per cent.
This information is recorded in a Ministry Paper, which was tabled yesterday (Sept. 5) in the House of Representatives by Finance and Planning Minister, Dr. Omar Davies.
The document reports that the overall operations were highlighted by the collection of $604 million in principal and interest in respect to a loan to Jamaica Grande (proceeds used to reduce amounts payable to FINSAC), sale of investment properties, and collection of accounts receivable (interest in non-performing loan at the Jamaica Redevelopment Foundation (JRF) Incorporated).
At the end of 2004/05, FIS had equity investment of $270 million in Jamaica Grande, and $36 million in Bath Holdings. In addition, the FIS-owned premises at 12-16 Oxford Road, which was valued at $158 million, as well as units in Carinosa, valued at $5 million. It is noted that efforts to dispose of its interest in the non-performing loans at JRF were delayed.
Furthermore, the FIS reported that shareholders’ net deficits of $376 million and $516 million signified a positive change, and was influenced by profits of $253 million. This was as a result of a reduction of $111 million in contributed capital, which represented both Jamaican and United States currency liabilities (bonds), which were assumed by the government in a prior period.
The $111 reduction in the contributed capital was represented by the transfer of properties valued at $39 million and the payment of $72 million to the Ministry of Finance and Planning.
During the year under review, the operating income grew by $258 million to $345 million, due mainly to an increase in interest income, which moved from $79 million in 2004 to $344 million in 2005.
This resulted chiefly as interest income of approximately $288 million was realised from the loan to Jamaica Grande. The interest was earned over numerous years, but only taken into account in 2004/2005, when it was fully collected. Another $55 million was earned as investment income, and $2 million as gain on disposal of investment properties.
Operating expenses of $97 million were approximately 41 per cent lower than that for the previous year, as the provision for customer loans (net of recoveries) was $97 million less than in 2003/04.
According to the Ministry Paper, there was a general decline in most expense items during the year and operations and administration costs were $66 million less in 2004/2005, compared to those for the previous year.
During the year, $97 million in expenditure for operations and administration was incurred with approximately $68 million representing legal fees in respect of the now defunct Century National Bank, and Blaise banks.
Approximately $10 million in salary expenses was saved by the FIS in 2004/05, compared to the previous year, as redundancy costs were incurred in the prior year and the staff complement was reduced by one to six employees.
The FIS was incorporated on September 29, 1995 with the mandate to manage the operations of the Blaise financial institutions, comprised of Blaise Trust Company and Merchant Bank Limited, Blaise Building Society and Consolidated Holdings Limited. On October 15, 1997 the company also took over the operations, assets and prescribed liabilities of the Century National financial entities, which consist of Century National Bank Limited, Century National Building Society and Century National Merchant Bank and Trust Company Limited.
It aims to maximise the realisation (rental or sale) of assets (property and other investments) in order to honour the liabilities (disbursements to former account holders of both Blaise and Century financial entities in accordance with the Schemes of Arrangement) of the respective financial entities.
The company also provides management services through its wholly owned subsidiary, the Jamaica Mutual Properties Limited, whose shares were acquired on April 1, 2001.

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