Corporate Profile - firstcaribbean · Dividend yield 4.5% 3.7% 3.2% 2.9% 2.1% Dividend payout ratio 53.6% 52.2% 37.2% 50.5% 25.4% Financial results Total revenue 568 551 606 492 543

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Corporate Profile

FirstCaribbean International Bank is a relationship bank offering a full range of market-leading financial services in Corporate Banking, Investment Banking, Treasury Sales and Trading, Retail Banking, Wealth Management, and Credit Cards. We are located in 17 countries around the Caribbean, providing the banking services that matter to our customers through 3,400 employees, in 100 branches and offices. We are the largest, regionally-listed financial services institution in the English- and Dutch-speaking Caribbean, with over US$10.5 billion in assets and market capitalisation of US$2.0 billion.

Our Vision: To be the Caribbean’s number one financial services institution:• FirstforCustomers–Helpingourclientsreachtheirfinancialgoals

• First for Employees – Creating an environment where ouremployeescanexcel

• First for our Communities – Making a difference in thecommunitiesinwhichweoperate

• First forShareholders–Generatingstrongreturnsforourshareholders

Our Mission: TobetheBankoffirstchoiceforcustomersintheCaribbean,leadingtheregioninbuildingqualityrelationshipswithourclients,byprovidingthemwithinnovativebankingsolutionstosuittheirneeds.

Our Strategic Imperative: Tobuildlong-lastingclientrelationshipsbyfocusingonfivekeystrategicpriorities:• Enhancing Customer Value by deepening customer

relationships• Diversificationofourincomestreams•BalanceSheetManagementtooptimisereturns•ImprovedProductivityandControl to improvethespeedandqualityofservicetoourcustomers

•Leveraging our relationship with our parent, CIBC, toprovideourcustomerswiththebenefitsofbeingamemberoftheCIBCgroup

Customers:Retail and Wealth Management focused on building andenhancing customer relationships through a series ofcustomer service, product, and channel enhancements. In2009,we launched a new consumer deposit product suitethatprovidescustomerswithbankingsolutionsdesignedtomeet their needs.We also launched our suite of consumercreditcardproductsinCuraçaoandrolledoutournewBritish

AirwaysVisaPlatinumCreditCardintothemarketsservedbyBritish Airways.During the year,we substantially improvedour Internet Banking service and increased the number ofcompaniessignedupforourbillpaymentservices.

Corporate Investment Banking (CIB) realigned its businessand adopted a team approach for customer coverage,designed to integrate the sales and service functions toprovide seamless and high quality service to Corporate,InternationalCorporateand InvestmentBankingcustomers.Withafocusondeepeningourrelationshipswithourclients,wearedevelopinginnovativesolutionstoassist inadaptingto the economic slowdown.We also introduced dedicatedClientServicesTeamsforeverymid-marketclient.Withthisnew approach Relationship Managers have more time toaddresssolutiondeliveryforclientsandtransactionrequests.

Employees: FirstCaribbean’s commitment to building employeecompetence and promoting talent and leadershipdevelopment continued through a series of learningopportunities offered to its employees regionally. Theinvestment in training met through the FirstCaribbeanUniversity included leadership, personal development, corebankingandsystemstraining.

There was also a fifty per cent increase in the numberof managers accredited under the Leadership EssentialsProgramme.TherewasalsoacontinuedfocusonbothRetailand Corporate segments, with the introduction of newtrainingprogrammes thatmet a critical business need andwereattendedbywithover400personsineightterritories.

Shareholders:We continue to maintain strong capital ratios, with Tier ICapitalratioat19%andTierI&TierIICapitalratioat22%attheendof2009.Alsoin2009,wepaidtotaldividendstoourshareholdersofUS$0.06persharewhichwereconsistentwith2008anddeliveredareturnonequityof12.3%.

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FinancialHighlights2009

$ millions, except per share amounts, as at or for the year ended October 31 2009 2008 2007** 2006 2005*Common share information Pershare-basicearnings 11.2 11.5 16.8 10.4 16.7-dilutedearnings 11.2 11.5 16.8 10.4 16.7Shareprice-closing 1.34 1.64 1.94 1.83 2.05Sharesoutstanding(thousands)-endofperiod 1,525,177 1,525,177 1,525,177 1,525,177 1,525,177Marketcapitalisation 2,044 2,501 2,959 2,791 3,127Value measures Pricetoearningsmultiple 12.0 14.3 11.5 17.6 12.3Dividendyield 4.5% 3.7% 3.2% 2.9% 2.1%Dividendpayoutratio 53.6% 52.2% 37.2% 50.5% 25.4%Financial results Totalrevenue 568 551 606 492 543Loanlossimpairmentexpense 43 32 17 10 7Operatingexpenses 320 314 302 295 262Netincome 175 180 261 164 260Financial measures Efficiencyratio 56.3% 57.0% 49.8% 60.0% 48.3%Returnonequity 12.3% 13.3% 20.4% 14.3% 22.6%Netinterestmargin 4.0% 4.0% 3.7% 3.7% 3.4%Balance sheet information Loansandadvancestocustomers 6,905 6,814 6,080 5,631 4,631Totalassets 10,503 10,940 11,856 11,422 9,573Deposits&otherborrowedfunds 8,697 9,220 10,034 9,871 7,772Debtissued 125 239 274 200 200Totalequity 1,519 1,336 1,361 1,199 1,100Balance sheet quality measures Commonequitytoriskweightedassets 25% 21% 22% 19% 22%Riskweightedassets 6,124 6,472 6,300 6,379 4,911TierIcapitalratio 19% 17% 14% 14% 12%TierIandIIcapitalratio 22% 20% 17% 17% 16%Other information Fulltimeequivalentemployees 3,452 3,541 3,538 3,432 3,370

*2005includesgainonsaleofRepublicBankLimitedsharesof$117million**2007includesVISAgainsof$52million

Basic EPS in 2009 was 11.2 cents per sharecomparedto11.5centspersharein2008.BasicEPSisameasureofnetincomeattributabletotheparentdividedby theweighted-averagenumberofcommonsharesnetoftreasuryshares.

ROE was 12.3% in 2009 compared to 13.3% in2008. ROE isakeymeasureofprofitability. It iscalculatedasnetincomeexpressedasapercentageofaveragetotalequity.

FirstCaribbean’sTierICapitalratiowas19%in2009 compared with 17% in 2008. The TierI Capital ratio is calculated by dividing Tier ICapitalbyrisk-weightedassets.

(1)2005excludesgainonsaleofRepublicBankLimitedsharesof$117million(2)2007excludesVISAgainsof$52million

(1)2005excludesgainonsaleofRepublicBankLimitedsharesof$117million(2)2007excludesVISAgainsof$52million

Chairman’sLetter

Executive ChairmanMichaelK.Mansoor

I am pleased to report that our 2009 financial results andoverall performance were relatively strong despite thecontinuinglackofrealgrowthandgenerallyweakeconomicconditions thatpersisted in severalof themarkets inwhichyourBankoperates.

TheBankachievednetincomeattributabletoequityholdersoftheparentof$171million($175millionin2008)andasin2008,adividendofUS$0.06persharewasdeclaredandpaidonthebasisoftheseresults.

TheBankiswellcapitalisedandinstrongandstablefinancialcondition.Whatthismeansisthatwearewellpositionedtocapitaliseonimprovementsingrowthandgeneraleconomicexpansionwhichmaybeginin2010.

Generallytheeconomyinourlargerislandmarketsisadirectfunctionof tourist arrivals andyieldperhead,buoyancy ininternationalfinancialcenters,foreigndirectinvestmentandhigh end real estate activity. Governments’ finances andrevenuesandemployment statistics aredirectly affectedbythesevariablesanditisexpectedthatastheworldeconomyreboundstheseeconomieswillexperiencegrowth.

While your Bank is impacted by these overall conditions,wehavebeen able to achievegood financial results in thekeysegmentsofthebusinessbecauseofourfocusonclientservice and cost containment, an unrelenting commitmentto product, systems and technology excellence and themaintenanceofarobustriskandcontrolculture.Inadditionwehavebeenabletomotivateourpeopletoworkassiduouslytoretainourclienteleandprovidehigherlevelsofservice.

Duringtheyear,wehavecontinuedtoinvestinthetraininganddevelopmentofourpeople.Thisfocuswillcontinueinthecomingyears,withsomeofourpeopletakingupassignmentsattheParentCompany,CIBC,inordertogainwiderspecialisttrainingandexpertise.

As importantly, we have made excellent progress instrengthening the basic infrastructure of the Bank in thekeyareasofcontrols, technologyandmanagementpoliciesand structures to promote judicious cost control, productenhancementsandefficientservicedelivery.

TheBoardofDirectorsandtheDirectorsofthesixoperatingsubsidiarieshaveprovidedstrongandenlightenedleadershipinensuringthatallkeyelementsofourgovernancestructureareinplaceandfunctioningandalsomonitoringthefinancialandoverallperformanceofthegroup.

Iwishtoplaceonrecordourappreciationtoallourpeople,Directors,Executivesandthe3,400client-servingandsupportpeoplefortheirtremendouscontributionduringthisdifficultbutsuccessfulyear.

Ialsothankourcustomers,hostgovernmentsandregulatorsfortheirsupportandloyaltyduringtheyear.

Michael K. MansoorChairman

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ChiefExecutiveOfficer’sLetter

CEOJohnD.Orr

Ourfinancialperformancein2009wasrelativelystronginthischallenging economic climate.Management continued theexecutionofourstrategywhichfocusestheorganisationonstrengtheninganddeepeningclientrelationships.

Group Financial PerformanceNetincomeattributabletoequityholdersoftheparentwas$171million.Prioryear incomewasslightlyhigherat$175million. With the slowdown in economic activity, demandforloanswassofterandloanbalanceswereflatyearonyear.Depositsdeclinedby6%assomecustomersneededfundstomeetothercommitments.

During the year the Bank repurchased debt at a discount,realisingagainof$18million.

The credit environmentwas challenging andprovisions forloan losses increased to 0.61% of gross loans from 0.46%in2008.Whilethisratiohasincreased, it isstillcomparablylowandcontinuestoreflecttheBank’sprudentapproachtomanagingrisk.

Prudent management of our operating expenses andproductivitygainsfromimprovementstoprocessesresultedinadeclineinthecost-to-incomeratioto56%from57%in2008.

Giventheeconomicclimate,wearepleasedwiththeBank’sperformance.

BusinessTo increase the value we deliver to clients, significantenhancements were made to our platform in 2009. Weintroduced new client service teams in our CorporateInvestment Bank to enhance service quality andresponsiveness.OurInternetBankingserviceisnowfasterandhas an enhanced user interface with improved navigation.Twonewbranches–Portmore,Jamaica,andGraceBay,Turks&Caicos–wereopenedthisyearaswecontinuedourbranchnetworkoptimisationprogramme.

Our loans processwas reengineered to significantly reducethe loanapprovalanddisbursementprocess time.Workonenhancingouraccount-openingprocessisnowunderway.

New products were launched. To enhance alignment ofourproductswithcustomerneedsandpromote theuseofelectronicchannels,theBankintroducedaninnovativenewsuiteofdepositproducts.Aco-brandedBritishAirwaysVisaPlatinumCreditCardwaslaunchedandourcreditcardswereintroducedinCuraçao.

PeopleFirstCaribbean’scommitmenttobuildingemployeeexpertiseandpromotingtalentandleadershipdevelopmentcontinuesthrough a series of learning opportunities offered to ouremployees regionally.Our investment inpeople focusesonleadership,personaldevelopment,corebankingknowledgeandsystemstraining.

Community PartnershipWe continue to invest 1% of profit in the FirstCaribbeanCommunityTrust,theBank’scharitablefoundation.UnsungHeroes and Adopt-a-Cause, our flagship programmes, arerecognisedregionallyfortheirimpactatthecommunitylevel.

SummaryChallenging economic conditions could continue in 2010.However, with the continuous investment in our peopleandsystems, theBank iswellpositionedtocapturegrowthopportunitiesastheeconomicclimateimproves.

John D. OrrChiefExecutiveOfficer

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BoardofDirectors

Seated,lefttoright:Ella Hoyos,CorporateSecretaryJohn D. Orr,ChiefExecutiveOfficerMichael K. Mansoor, Chairman

Standing,lefttoright:G. Diane StewartThomas WoodsPaula RajkumarsinghDavid RitchRichard VennSir Fred GollopSir Allan FieldsRichard Nesbitt David Williamson

Sonia Baxendale (absent)

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SeniorManagementandAdvisors

Michael K. Mansoor ExecutiveChairman

John D. OrrChiefExecutiveOfficer

Mahes S. WickramasingheChiefAdministrativeOfficer

Tom Crawford ManagingDirector,Retail&Wealth

Annette PhillipsManagingDirector,HumanResources

Kiyomi DanielChiefFinancialOfficer

(Acting)

Richard Rice ManagingDirector,

GroupTreasury

Ian ChinapooManagingDirector,InvestmentBanking

ExECuTIVE MANAGEMENT COMMITTEE

Hugh BoyleChiefRiskOfficer

Mark YoungManagingDirector, CorporateBanking

Rolf PhillipsManagingDirector, RetailBanking

SENIOR MANAGEMENT

Sharon BrownManagingDirector–Bahamas

Oliver JordanManagingDirector–Barbados

Larry NathManagingDirector–Trinidad

Clovis MetcalfeManagingDirector–Jamaica

Pim van der BurgManagingDirector–NetherlandsAntilles

Minish ParikhManagingDirector–Operations

Donna GrahamChiefInternalAuditor

Ella HoyosGeneralCounsel

Peter SteenveldManagingDirector–Marketing&Cards

Eva LamasManagingDirector–TransactionBanking

ADVISORS

Legal Advisors ChanceryChambersCarrington&Sealy Fitzwilliam,Stone&Alcazar Corporate Secretary EllaN.Hoyos Registrar and Transfer AgentFirstCaribbeanInternationalTrustandMerchantBank(Barbados)Limited Auditors Ernst&Young Bankers FirstCaribbeanInternationalBank(Barbados)Limited

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FirstCaribbeanRetailandWealthManagement

Looking forward to 2010 we expect further enhancements to our products and services. We will launch products focused on our high value and small business segments and complemented with strong financial advisory services.

RetailandWealthManagement

The Retail and Wealth Management business segmentprovides a full range of financial products and services toalmost300,000customersin17Caribbeancountries.

Enhancing Customer RelationshipsOurfocusin2009wasonbuildingandenhancingcustomerrelationships througha seriesof customer service,product,andchannelenhancements.Toimprovecustomerservice,weembarkedonaprocessreengineeringeffortthatanalysedhowcustomersutiliseourservicesandthenmadeimprovementstoenhancecustomerexperience.

Oneoftheprocessenhancementareasfocusedonimprovingtheefficiencyofourloanapplicationprocesswithagoaltoturn-around90%ofinstalmentloanswithintwodays.Followingaverysuccessfulpilotonstaffloans,wesystematicallylaunchedtheprocessimprovementsinallcountries.Asaresult,wearealready seeing dramatic improvements in loan turn-aroundtimesaswellascommensurateincreasesinloanvolumes.

In 2009,we enhanced our product offerings by launchinga new deposit product suite. This suite was designed tobetter support the needs of our customers and encouragethemigrationofmanual transactions frombranches toourABMsandInternetBankingchannels.Asaresultofthesenewproducts,wesawa17%increaseintotalchequingaccountsduringtheyear.

Onthecreditproductside,weimplementedsystemchangesthatenabledustobundleproductstobettermeetcustomers’needsanddeepencustomerrelationships.WealsosuccessfullylaunchedtheBritishAirwaysVisaPlatinumCreditCardinallmarketsservedbyBritishAirways.Additionally,welaunchedourconsumercreditcardproductsintotheCuraçaomarket.Inothermarkets,wefocusedonmarketingandsellingcreditcardstonewandexistingcustomers.

We enhanced our electronic channels and in particular wesignificantlyimprovedtheusabilityandspeedofourInternetBanking and completed the sign-up of key merchants toenhancethevaluedeliveredbyourinternetpaymentservice.

Improvementswerealsomadetosimplifythesign-upprocessforInternetBankingandwelaunchedaseriesofcampaignsunder the “Just Click It” theme, which resulted in a 17%increaseinuserscomparedto2008.

Performance and OutlookDue to the challenging economic times and the ensuingconservative consumer behaviour, demand for loansincludingcreditcardssoftened,resultinginrelativelyflatyear-over-year growth. Aswould be expected, some consumerstapped into savings to meet current financial obligationsandconsequentlydepositbalancesdeclinedduringtheyear.The overall contribution of the Retail andWealth segmentdeclinedprimarilydue to lowernet interest income fuelledby the lower interest rate environment, as well as to thedeclineinforeignexchangeearningsresultingfromreducedtransactionvolumes.Thiswaspartiallyoffsetbyadecreaseinexpensesduetoeffectivecostcontainmentmeasures.

Wecontinuedtooperateinadifficultcreditenvironmentin2009which requiredus to increaseour focuson efforts toreduce delinquency and improve credit quality. As a resultoftheseeffortswewereabletokeepdelinquencyandnon-performingloanswithinreasonablelevels.

Wecontinuedourfocusonclientacceptanceprocedurestoensure that our standards on Anti-Money Laundering andKnow Your Client due diligence are maintained. In somejurisdictionsweimplementedprojectstoreviewandupgradethe files for long-standing existing accounts to currentregulatorystandards.

Lookingforwardto2010weexpectfurtherenhancementstoourproductsandservices.Wewilllaunchproductsfocusedonourhighvalueandsmallbusinesssegmentscomplementedwith strong financial advisory services. The small businesssegmentwillbemergedintoourRetailandWealthbusinessinthebeginningof2010.

Wesincerelythankourregionalleadersandstafffortheirhardwork todeliver a solidperformance in adifficult economicenvironment.

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FirstCaribbeanCorporateInvestmentBanking

Corporate Investment Banking delivered a solid performance despite the challenging economic climate. Management improved focus on sustaining long-term relationships and developed innovative solutions to help clients adapt to the economic slowdown.

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In 2009, theCaribbean continued to be impacted by theglobaleconomicrecession.Manyofourmarketsexperiencedlower tourist arrivals, lower inflows of foreign directinvestment, andcontractionofdomestic economic activity.CorporateInvestmentBankingdeliveredasolidperformance,despite the challenging climate. Management improvedfocus on sustaining long-term relationships and developedinnovative solutions to help clients adapt to the economicslowdown.

We participated in a number of significant financingarrangementswhich included acting as lead arrangers, co-managers, placement agents and financial advisors. Ofnote were The Commonwealth of The Bahamas US$200millionandBahamasElectricityCorporationUS$211millionsyndicated loan facilitiesandNassauAirportDevelopment’sUS$42millionseniornotesandUS$70millionsubordinatednotes.We raisedclientfinancing inanumberof territories,namely Anguilla, Netherlands Antilles, Jamaica, St. Luciaand Trinidad and Tobago. These financings included newissuances,debtre-financingsandprojectfinancingsforlargecorporate and sovereign clients, including one of Jamaica’soldesthotels.

Total loans remained relatively flat year over year withincreases in government loans due to strengthening offoreignexchangereserves,beingpartiallyoffsetbyadeclinein business loan volumes as businesses were selective intheirapproachtoborrowingandfundinginvestments.Total

deposits, however, declinedmarginally as a direct result oflower business activity. Total contribution declined year onyear primarily due to the lower foreign exchange earningsdrivenby lower transactionvolumesand spreads.With thecontinued effects of the recession, loan loss impairmentexpensesincreasedincomparisontotheprioryear.

Lastyearwetookstepstoformaclient-focusedorganisationwiththeestablishmentoftheCorporateInvestmentBank.AkeycomponentwastheintroductionoftheSeniorCoverageModeltoserveourclientswiththemostcomplexfinancingneeds through a team of skilled and experienced Sectorand Product Specialists. This model has worked extremelywell andaidedus in servinguniqueneedsofclients in thischallengingperiod.

WealsointroduceddedicatedClientServicesTeamsforeverymid-market client. With this new approach RelationshipManagers have more time to address solution delivery forclientsandtransactionrequests.

2010isexpectedtobeanotherchallengingyearregionally.Althoughtherearesignsof recoveryglobally,weanticipatethat itwill takesometimefortheeffectsto liftourtourismmarketsandrestoreforeigndirectinvestment.Nevertheless,FirstCaribbean is confident that the strategieswe have putin place to sustain long-term relationships with our clientsprovideasolidplatformforgrowthastheeconomicclimateimproves.

CorporateInvestmentBanking

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OurEmployees

Our employees delivered, as exemplified by the 10 Players of the Series who were recipients of FirstCaribbean’s annual employee recognition awards. The Players of the Series demonstrated outstanding contributions in sales, relationship management, and productivity improvement while exemplifying the tenets of Helpful Partner.

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OurEmployees

We place our employees at the centre of our operations.Since inception, we have remained committed to fulfillingourpromisetoassistintheprofessionaldevelopmentofouremployeesbycreatingavenuesfortheirsuccess.In2009,wecontinued to advance our goals of providing opportunitiesthrough training, reward and recognition programmes,amidstchallengingeconomictimes.

Our employees delivered, as exemplified by the 10 Players of the Serieswhowere recipientsof FirstCaribbean’s annualemployee recognition awards. The Players of the Seriesdemonstratedoutstandingcontributionsinsales,relationshipmanagement, and productivity improvement as well asexemplifyingthetenetsofHelpfulPartner.

Employer of ChoiceFirstCaribbeanisproudtobeincludedinthe2009editionofThe Oxford & Cambridge Careers Handbook,which providesinvaluable information for graduates and alumni of theseinstitutions entering or re-evaluating the job market. Thehandbook profiles a selection of organisations aroundthe world that are considered to be employers of choice.FirstCaribbean is the only company within the Caribbeanregiontobeincluded.

Employee BenefitsManaging employee benefits (medical, dental, life anddisability coverage) is continually challenging in anenvironmentwithcontinuallyescalatingcostsofhealthcare.Forthefirsttime,FirstCaribbeanthroughchangestoitsbenefitofferprovidedemployeeswithchoiceswhichenabledthemtobettermanage their coverage and costs andprovided agreaterlevelofcoverageoverall.Additionally,throughvendorconsolidation,wewerealsoabletoachievelowercostsoverall.

Training and DevelopmentFirstCaribbean’s commitment to building employeecompetence and promoting talent and leadershipdevelopment continued through a series of learningopportunities offered to our employees regionally. The

investment in trainingdelivered through theFirstCaribbeanUniversity(FCU)includedleadership,personaldevelopment,core banking and systems training. Through the FCU,employees at every level, meeting the criteria for theprogrammes offered, were able to benefit from valuabletraining opportunities aimed at helping them to moreeffectivelyperformtheirroles.

There was also a fifty per cent increase in the numberof managers accredited under the Leadership EssentialsProgramme. There was also a continued focus on bothRetailandCorporatesegmentswiththeintroductionofnewtrainingprogrammes thatmet a critical business need andwereattendedbyover400personsineightterritories.

Duringtheyear,wehavecontinuedtoinvestinthetraininganddevelopmentofourpeople.Thisfocuswillcontinueinthecomingyear,withsomeofourpeopletakingupassignmentsattheParentCompany,CIBC,inordertogainwiderspecialisttrainingandexpertise.

Succession PlanningDuring2009,successionplansforallexecutivepositionswererefreshed.Wewillbuilduponthisin2010byexpandingonindividualdevelopmentplans toenable talented individualstoachievetheirgreatestpotential.

Organisational AlignmentAfter the re-organisation in 2008 which establishedCorporateInvestmentBankingandRetailBanking&WealthManagement, theyearwasspentaligningthenearly3,400managersandstafftothesebusinessunitsaswellaswithinthesupportareasofFinance,Technology,Operations,MarketingandProductDevelopment, InternationalCorporateBankingandHumanResources.

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Our Communities

unsung Heroes – Another Great Year Since2003,FirstCaribbeanhashonouredselfless individualswhospendtheir livesservingothers.In2009,JohnRoache,adedicated42-year-oldcommunityworkerfromSt.Vincent& theGrenadineswasnamedRegionalUnsungHero. Johnwas inspired by his mother’s life of service to others anddedicatedhisown life todo thesame.MiltonMcLean,48,of Tortola, British Virgin Islands and seventy-six-year-oldCynthia Stephenson of Dominica were also recognised fortheirhumanitarianwork.

The Unsung Heroes regional programme has providedvaluable funding for worthwhile community projects overtheyears,andalsoensuresthattheworkofthoserecognisedannually,continues.

In2009,FirstCaribbeanInternationalBankcontributedmorethanUS$1.6milliontoworthycausesthroughouttheregion.The majority of funding for corporate social responsibilityinitiatives went to community relations activities, includinginitiativestoalleviatepovertyandassistthehomeless,publicandprivateschoolprogrammes,enhancingtheenvironmentthroughcreationofgreenspacesandnumerousothers.

The Bank’s flagship initiative, Unsung Heroes, continuedto increase in popularity. Three people were rewarded fortheir work to better their communities while several morewerehonouredforsimilarworkatthenationallevelineachFirstCaribbeanterritory.

Significant progress was also reported in the newerprogrammesaimedatprovidingopportunitiestoassistyoungpeoplethroughentrepreneurship.Theyearsawacontinuationof the relationshipwith theCaribbeanAssociationofYouthBusinessProgrammes,whosepartnershipwithFirstCaribbeanwillcontinuetoprovidevaluableassistancetoyoungpeoplethroughouttheregionwhoaredesirousofstartingtheirownbusinesses.

Despite the economic challenges of 2009, FirstCaribbean continued to actively support worthwhile causes in the region. Led by its employees, the Bank contributed more than US$1.6 million on signature initiatives like its Unsung Heroes and Adopt-a-Cause programmes, and numerous other community relations programmes.

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Our Communities

Helping our neighbours in times of needWhen fire severely damaged the St. Jude’s Hospital in St.Lucia,FirstCaribbeanwas thefirst to respondwithfinancialassistancetothehospital’srebuildingfund.

ChairmanoftheBank,MichaelMansoorlaunchedthefundwith a contribution of EC$200,000 to a newly establishedaccount named the St. Jude’sHospital Rehabilitation Fund.PrimeMinister of St. Lucia, Stephenson King expressed hisdeep appreciation for the quick action and the start-upcontribution,onbehalfofthehospitalandthepeopleofSt.Lucia.

Staff Volunteerism peaks in 20092009wasanextraordinaryyearforAdopt-a-Cause,with98%ofstaffparticipatinginvarioussocialprogrammesthroughouttheregion.

Under theAdopt-a-Causeprogramme,staffactonrequestsmade by individuals and/or organisations for help andactivelyplay apartbywayofdirect involvement in seeingtheseprojectstofruition.Thekeytotheprogramme’ssuccesshasbeenactivevolunteerism.

Beneficiariesin2009includedpublicandprivateschools,theelderly, non-governmental organisations, children’s homes,amongnumerousothers.

Three-time champs – Mona wins again!Theall-girlsteamfromtheUniversityoftheWestIndies(UWI),MonaCampusinJamaica,beatfourothercompetingteamstowinfirstplaceand theFirstCaribbean InternationalBankChallenge Trophy in the UWI/FirstCaribbean InternationalBank2009CaseAnalysisCompetition,ontheirhomesoil.

Two new teams, the University of Technology (UTECH),JamaicaandtheUniversityofSouthernCaribbean,Trinidad,also took part. The competition, developed under aMemorandumofUnderstandingbetweenFirstCaribbeanandUWI,aimstodevelopcasewritingskillswithintheUniversityandincreasetheavailableregionalcasestudiesforusebythestudentpopulation.

Funding for Youth Entrepreneurship TheBarbadosYouthBusinessTrust(BYBT)receivedfinancialhelpfromtheBanktoadvanceitslendingaspartofitsYouthEntrepreneurshipprogramme.

The organisation received US$35,000 for its activities inBarbados.

YouthBusinessInternational,towhichtheBYBTisaffiliated,andFirstCaribbeanarepartnersinhelpingtocombatyouthpovertyandunemploymentintheregion.

TheBYBTistheleadprogrammewithresponsibilityforassistingwiththestart-upofprogrammes,sharingbestpracticesandmonitoringbrandquality.ProgrammescurrentlyoperateinBarbados, Trinidad&Tobago, Jamaica,Dominica, St. LuciaandBelize.

The University of the West Indies (UWI) Mona team which won the UWI/First-Caribbean 2009 Case Analysis Competition on Tuesday, June 2, 2009.

(Front row l-r) Jade Wright, Tenneil Rashford, Sherica Lewars, Tifain Taylor, Leslie Shirley, Mehar Alam, Horace Allen and Vanessa Hemans. With them are (2nd left back) Clovis Metcalfe, Managing Director, FirstCaribbean International Bank (Jamaica) Limited and (5th right back) Mark Figueroa, Dean, Faculty of Social Sciences, UWI.

Staff from Corporate and LPC at the Albert Street Branch merged their resources and efforts to further a cause that will have a positive impact for years and generations to come, with construction of a new school building in Southern Belize. In photo, staff assisting with construction.

Management’sDiscussionandAnalysis

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Management’sDiscussionandAnalysis

FINANCIAL PERFORMANCE REVIEWFinancial overview

$millions,exceptpershareamounts,asatorfortheyearendedOctober31 2009 2008 2007* Total revenue 568 551 606Net income 175 180 261Netincomeattributabletotheequityholdersoftheparent 171 175 256Pershare–basicearnings 11.2 11.5 16.8–dilutedearnings 11.2 11.5 16.8Dividendpershare 0.0600 0.0600 0.0625Total assets 10,503 10,940 11,856Returnonequity 12.3% 13.3% 20.4%Efficiencyratio 56.3% 57.0% 49.8%Shareprice–closing 1.34 1.64 1.94TierIcapitalratio 19% 17% 14%TierIandIIcapitalratio 22% 20% 17% *Includedin2007areVISAgainsof$52million

Management’s discussion and analysis (MD&A) should beread in conjunctionwith the audited consolidatedfinancialstatementsincludedinthisAnnualReport.TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandardsandareexpressedinUnitedStatesdollars.Certaincomparativeamountshavebeenreclassifiedtoconformwith thepresentationadoptedinthecurrentyear.

OverviewTheFirstCaribbeanGroup ismanagedby segments. Thereare four (4) lineofbusinesssegmentswhichoperateacrossfive(5)geographicsegments.

The line of business segments are Retail and WealthManagement(R&WM),CorporateInvestmentBanking(CIB),TreasurySalesandTrading(TST),andOther(whichincludesthefunctionalgroupsthatsupporttheotherlinesofbusiness).

Highlightsandcommentaryonthelineofbusinesssegmentscanbefoundonpages7to10.

ThegeographicsegmentsareBarbados,Bahamas,Cayman,Jamaica and Trinidad. The Barbados segment comprisesonshore and offshore operations in Barbados, Belize, theEasternCaribbean(Anguilla,Antigua&Barbuda,Dominica,Grenada,St.Lucia,St.Kitts&NevisandSt.Vincent)andsometrustbusiness in Jamaica,butexcludes theCorporateHeadOffice (HO) operations. The Bahamas segment comprisesoperations in Bahamas and Turks & Caicos Islands (TCI).The Cayman segment comprises operations in Cayman,British Virgin Islands (BVI), St.Maarten and Curacao. TheJamaicanandTrinidadsegmentsrelatetooperationsinthosejurisdictionsonly.

ThefollowingdiscussionandanalysisisbasedontheGroup’soverall results with commentary referring to the segmentswheredeemedrelevant.

Net income contribution by geographical segment excluding HO and eliminations (%)

Total asset contributions by geographical segment excluding HO and eliminations (%)

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Management’sDiscussionandAnalysis(continued)

REVIEW OF CONSOLIDATED STATEMENT OF INCOME

The Bank has delivered relatively strong results, despitethe challenging economic environment, with net incomeattributableto itsshareholdersof$171million,adeclineof2%or$4millionyearonyear.

Totalrevenueswereupby$17millioncomparedtotheprioryeardrivenbyhigheroperatingincomewhichincludedgainson repurchase of debt. This was partially offset by higheroperatingexpensesof$6million,loanlossexpensesof$11million, and taxation of $5 million. In the prior year totalrevenueswereimpactedbylossesontradingsecurities.

Net interest income and margin$millions,fortheyearendedOctober31 2009 2008Averageassets 10,721 11,398Net interest income 433 458Netinterestmargin 4.0% 4.0%

Netinterestincomedeclinedyearonyearby$25millionor5%primarilyduetothefallininterestrates.Interestincomedecreasedby$108millionor15%,while interestexpensesdecreasedby$83millionor31%whichresulted inspreadswideningslightlyduringtheyear.

Thedeclineininterestincomewasduetothefollowing:• Lowercashplacementsincomeresultingfrombothloweraveragevolumesandyields;

• Lower securities income due to lower average volumes,partiallyoffsetbyhigheryields;and

• Lowerloanincomeduetoloweryields,partiallyoffsetbyhigheraveragevolumes.

Thedeclineininterestexpenseswasduetothefollowing:• Lowerdepositliabilityexpensesresultingfrombothlowervolumesandcostoffunds;and

• Lowerdebtexpensesduemainlytoloweraveragevolumes.• Thisdeclinewashoweverpartiallyoffsetbyhigherinterestexpensesassociatedwithderivatives.

Operating income$millions,fortheyearendedOctober31 2009 2008Netfee&commissionincome 69 70Foreignexchangeearnings 45 50Netsecuritiesgains/(losses) 1 (28)Nethedgelosses (5) (6)Gainsonrepurchaseofdebt 18 –Other 7 6 135 92

Operatingincomeincreasedby$43millionor47%yearonyear primarily due to lower securities losses of $29millionandgainsonrepurchaseofdebtatadiscountof$18million.Theseincreaseswerehoweverpartiallyoffsetbylowerforeignexchangeearningsby$5million.

Intheprioryear,theGroup’stradingsecuritieswereimpactedbytheeffectoftheUSeconomicdownturnonmarketvalues,interestratesandcreditspreads.Duringthecurrentyear,thetradingportfoliowasfullydisposedof.

Foreignexchangeearningsweredownduetolowervolumesandspreadsprimarilyinthesecondhalfoftheyear.

Operating expenses$millions,fortheyearendedOctober31 2009 2008Remunerationandbenefits Wagesandsalaries 143 139 Benefits 37 27 180 166Property&equipmentexpenses 39 42Depreciation 19 25Professionalfees 14 15Advertising&marketing 6 8Businessdevelopment&travel 5 6Communications 9 7Other 48 45 320 314

Operatingexpensesincreasedyearonyearby$6millionor2%mainlyduetoemployeerelatedcostswhichincreasedby$14millionor8%drivenprimarilybyannualsalaryincreases,postretirementbenefits,andotherstaffallowances.Declinesin other expense categories resulting from broad costcontainment measures largely offset those increases. TheGroup’sefficiencyratio(ratioofcoststorevenues)was56%versus57%intheprioryear.

Revenues and Operating expenses (uS$millions) and efficiency ratio (%)

*2005excludesgainonsaleofRepublicBankLimitedshares$117million**2007excludesVISAgainsof$52million

18


Loan loss impairment expense$millions,fortheyearendedOctober31 2009 2008Individualimpairmentexpense Mortgages 3 2 Personal 9 8Business&Government 30 19 42 29Collectiveimpairmentexpense 1 3 43 32

Loan loss expenses were substantially up year on year,increasingby$11millionor34%primarilyduetoincreasesinspecificorindividualimpairmentonBusinessandGovernmentloans.Theratioofloanlossexpensestogrossloansincreasedto0.61%attheendofthisyearcomparedwith0.46%attheendoftheprioryear.Theratioofnon-performingloanstototal loans increased to8.0%thisyear from5.4% lastyearend. Taxes$millions,fortheyearendedOctober31 2009 2008Incometaxexpense 27 22Netincomebeforetaxes 202 202Effectivetaxrate 13.4% 10.9%

Taxeswerehigherthantheprioryearby$5millionor23%duetoagreaterpercentageofincomeintaxablejurisdictions.

Foreign exchangeTheBankconductsbusinessintwojurisdictions(JamaicaandTrinidad) that have functional currencies that float againsttheUnitedStates(U.S.)dollar.TheJamaicandollarsuffereda16.2%devaluationyearonyear,whiletheTrinidaddollarremained relatively stable. The Jamaican dollar devaluationresulted in a loss in the translated value of our U.S. dollarpresentationearningsof$1.5million.

REVIEW OF CONSOLIDATED BALANCE SHEET$millions,asatOctober31 2009 2008Assets Cash&depositswithBanks 1,277 985Securities Trading - 536Available-for-sale 1,744 2,004

1,744 2,540Loansandadvances Mortgages 2,513 2,496Personal 760 823Business&Government 3,805 3,642Other (12) (13)Provisionsforimpairment (161) (134)

6,905 6,814Other assets 577 601 10,503 10,940 Liabilities & equity Deposits Individuals 3,613 3,741Business&Government 4,876 5,254Banks 141 171Other 28 30

8,658 9,196Otherborrowings 38 24Debtissued 125 239Other liabilities 163 145Totalequity 1,519 1,336 10,503 10,940

AssetsTotal assets declined year on year by $437 million or 4%mainlyduetothedisposalofsecuritiesduringtheyear.Loansandadvances remainedflatyearonyearasaconsequenceoftheprevailingeconomicenvironment.Cashanddepositswith Banks however increased by $292million or 30% asfundsreceivedonthedisposalofsecuritieshadnotbeenfullyredeployedatyearend.

19


LiabilitiesCustomerliquidityneedsresultedinadeclineindepositsby$538millionor6%anddebt issueddeclinedasa resultofrepurchasesduringtheyear.

Total equityTheincreaseintotalequitywasdrivenbynetincomefortheyearandimprovementsinmarketvaluesofavailable-for-salesecurities;partiallyoffsetbydividendpayments.

Risk management approachFirstCaribbean assumes a variety of risks in its ordinarybusiness activities. Risk is definedas any event that could:damage the core earnings capacity of the Group; increaseearnings or cashflow volatility; reduce capital; threatenbusinessreputationorviability;and/orbreachregulatoryorlegalobligations.

TheBank’sapproachtoriskmanagementisbasedonsoundbanking principles and a robust governance structure.Risk is managed within tolerance levels established by ourmanagement committees and approved by the Board ofDirectors and its committees (the Board). This is achievedthrough a comprehensive framework of measurement,monitoring and control policies, procedures andprocesses.Further information on credit, market and liquidity riskswithintheBankcanbefoundinnote33oftheconsolidatedfinancialstatementssection.

Primary responsibility for themanagement of risk lies withlinemanagement in our various individual businesses. Therisk management department, which reports to the ChiefRisk Officer, develops risk policies and procedures andprovidesindependentoversightandanalysisthroughitsfivecentrally based teams – credit risk,market risk, receivablesmanagement,complianceandoperationalriskmanagementandcontrols.

The Bank’s risk management policies and procedures aredesignedtoidentifyandanalysetheserisks,tosetappropriaterisk limits, and to monitor and enhance risk managementpracticestoreflectchangesinmarkets,productsandevolvingbestpractice.

Arobustriskandcontrolgovernancestructureisembeddedwithineachstrategicbusinessunit.Representativesfromtheriskteamsinteractwiththeseniorleadershipofeachbusinessunit inorder to identifyandmanage risks in the respectivebusinesses. This approach is supported by comprehensiveenterprisereporting.

Credit riskCreditriskistheriskthatacustomerorcounterpartywillbeunableorunwillingtomeetacommitmentthatithasenteredintoand that any securitypledged in supportof thecreditdoes not cover the customer’s liabilities to the Bank in theeventofarepaymentdefault.ThecreditrisksinFirstCaribbeanariseprimarily from lendingactivities tocustomersbutalsooccurwithbonds,guaranteesandsecurities.

Credit risk is managed and controlled on the basis ofestablished credit processes and policies operating withina framework of delegated authorities. In addition toapprovingtheGroup’skeycreditpoliciesandsettingcreditriskappetitesandtolerances,theRiskandConductReviewCommitteeoftheBoardalsodelegatescreditapprovallimitstotheCreditCommitteeoftheBank.TheCreditCommitteeis chaired by the Chief Risk Officer who also delegateslending authority to individualmembers of the Credit RiskManagement Department and also to front line lenders.Thereisappropriatesegregationofdutiesbetweencustomerfacing functions responsible for originating and managingexposures,theCreditRiskManagementfunctionresponsiblefor credit adjudication and oversight and the Operationsfunction responsible for disbursing loans and safekeepingsecurity.

Creditgrading,scoringandmonitoringsystemsfacilitatetheearlyidentificationandmanagementofdeteriorationinloanquality.Thecreditmanagementprocessisunderpinnedbyanindependentsystemofcreditreviewbycreditconformanceteams. Delinquent facilities are subject to separate andadditional oversight by the receivablesmanagement team.Classification isautomatedandoperatesstrictly in linewithregulatoryandaccountingstandards. Creditprovisionsareindependently calculated in accordance with InternationalFinancial Reporting Standards for statutory reporting andin accordance with the Financial Institutions Act to meetregulatory requirements by the central risk and financialcontrolsteams.

Market riskMarketriskisthemeasurementofpotentiallossarisingfromadversemovementsininterestrates,foreignexchangerates,equity andcommodityprices, andcredit spread risk in theBank’sinvestmentportfolios.Itarisesintradingactivities,aswellasinthenaturalcourseofwholesaleandretailbusiness.

Loans and advances and deposits (uS$millions)and loans to deposits ratio (%)

20


TheprincipalaimofFirstCaribbean’smarketriskmanagementactivities is to limit the adverse impact of interest rate andexchange ratemovements on profitability and shareholdervalueandtoenhanceearningswithindefinedlimits.

The Risk and Conduct Review Committee of the Boardreviews market risk strategy and overall limits. It approveskeypoliciesandoverseesthemeasurement,monitoringandcontrolregime.

There is no single risk measure that captures all aspectsof market risk. FirstCaribbean uses several risk measuresincludingValueatRisk(‘VaR’),sensitivitymeasuresandstresstesting. Market risks are managed by setting limits baseduponthespecificmarketsandproductswhereFirstCaribbeanisinvolved,aswellastheamountoftheGroup’scapitalatrisk.Thesemeasurementmethodologiesutiliseinternationalbestpractice.There isacentralised,dedicated riskmanagementteam charged with the responsibility to ensure that therisk measurement methodologies used are appropriate forthe risks being taken and that appropriate measurement,monitoringandcontrolproceduresareinplace.

Compliance riskCompliancerisksareassociatedwithfailurestocomplywithlaws,regulations,rules,andthecodesofethicsandconductapplicabletoourbusinessactivities.Suchfailurescangiveriseto legalor regulatory sanctions,materialfinancial loss,oralossofreputationtotheBank.

Primary responsibility for compliance lies with territorialline management. The compliance team within the riskmanagement department is tasked with identifying thecompliance obligations in each country where the Bankoperates.Italsoprovidesadviceandguidancetothebusinesslinesoncompliancerisksandthedevelopmentofappropriatepolicies and procedures to ensure compliance with alllegislationandinternalcodeofconductandethicspolicies.ItindependentlyassessesandmonitorscomplianceandreportstotheAudit&GovernanceCommitteeoftheBoard.

Operational risk management and controlsFirstCaribbean defines operational risk as the exposure tolossfromfailedorinadequateinternalprocesses,peopleandsystemsorfromexternalevents.Itistheriskofdirectorindirectloss,ordamagedreputation,duetodeficienciesorerrorsin

theGroup’sinternaloperationswhichmaybeattributabletofraud,humanerror,processesortechnologyfailure,orduetoexternalevents.OperationalrisksareinherentinallactivitieswithintheBank,includingitsoutsourcedactivitiesandinallinteractionswithexternalparties.

Stronginternalcontrolandqualitymanagement,consistingof a fraud framework, leadership and trained staff, are thekeytosuccessfuloperationalriskmanagement.Eachstrategicbusinessunitisprimarilyresponsibleformanagingtheirownoperational risks.Riskmanagementdevelopsandmaintainsthe framework for identifying, monitoring and controllingoperationalrisksandsupportsthebusinessinimplementingthe framework and raising awareness of operational risks.Theteamsetspolicyandmonitorscompliance.Operationalrisk management activities across the Group are reportedregularlytotheAudit&GovernanceCommitteeandRiskandConductReviewCommittee.

FirstCaribbean’s operational risk management frameworkincludes ongoing monitoring through self-assessment ofcontrol deficiencies and weaknesses and the tracking ofincidents and loss events to ensure that, once identified,control deficiencies are communicated and remedied in atimelyfashionacrosstheGroup.

Liquidity riskLiquidity risk is defined as the risk that the Group willexperience difficulty in financing its assets andmeeting itscontractualpaymentobligations,orwillonlybeabletodosoatanunacceptablyhighcost. FirstCaribbean isexposedtoliquidityriskthroughourgeneralfundingactivitiesandinthemanagementofourassetsandliabilities.

FirstCaribbean’s exposure to liquidity risk is governed by apolicy approvedby the Board. The operation of the policyis delegated tomanagement in the form of the Asset andLiability Committee (ALCO). The Group and individualoperating company ALCOs are responsible for monitoringliquidityrisk.Day-to-daymanagementofliquidityishandledbythetreasuryteam.

The Bank performs stress tests and scenario analyses toevaluatetheimpactofstressesonitsliquidityposition.Thesetests are conducted at both aGroup specific and systemicrisklevel.TheresultsarereportedtotheBoardquarterlyandindependentlyreviewedbythemarketriskfunction.

21

ConsolidatedFinanci

alStatements2009

22

P.O.Box261,Bridgetown,BB11000Barbados,W.1.

StreetAddressWorthing,ChristChurch,BB15008Barbados,W.1.

Tel:246-430-3900Fax:246-426-9551246-426-0472246-435-2079246-430-3879www.ey.com

AuDITORS’ REPORT

To the Shareholders of FirstCaribbean International BankLimited.

We have audited the accompanying consolidated financialstatementsofFirstCaribbeanInternationalBankLimitedanditssubsidiaries(“theGroup”)whichcomprisetheconsolidatedbalancesheetasofOctober31,2009andtheconsolidatedstatementsof income,changes inequityandcashflowsfortheyearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatorynotes.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fairpresentation of these consolidated financial statements inaccordancewithInternationalFinancialReportingStandards.This responsibility includes: designing, implementing andmaintaininginternalcontrolrelevanttothepreparationandfairpresentationofconsolidatedfinancialstatementsthatarefree from material misstatement, whether due to fraud orerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

Auditors’ ResponsibilityOur responsibility is to express an opinion on theseconsolidated financial statements based on our audit. Weconducted our audit in accordance with InternationalStandards on Auditing. Those standards require that wecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhethertheconsolidatedfinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain auditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditors’judgement,includingtheassessmentoftherisksofmaterialmisstatement of the financial statements, whether dueto fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’spreparationandfairpresentationofthefinancialstatementsinorder todesignauditprocedures thatareappropriate inthecircumstances,butnotforthepurposeofexpressinganopinionon theeffectivenessof theentity’s internal control.An audit also includes evaluating the appropriateness ofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmade bymanagement, aswell as evaluating theoverallpresentationofthefinancialstatements.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion.

OpinionInouropinion,theconsolidatedfinancialstatementspresentfairly, in all material respects, the financial position of theGroupasofOctober31,2009anditsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards.

BarbadosDecember10,2009

23

For the year ended October 31, 2009(expressed in thousands of united States dollars)

Consolidated Statement of Income

Notes 2009 2008 $ $ Interestandsimilarincome 614,812 722,971Interestandsimilarexpense 181,317 264,684 Netinterestincome 3 433,495 458,287Operatingincome 4 134,737 92,256 568,232 550,543 Operatingexpenses 5 319,718 313,592Loanlossimpairment 14 43,369 32,015Amortisationofintangibleassets 18 2,963 2,963 366,050 348,570 Income before taxation 202,182 201,973 Income tax expense 6 26,981 22,220 Net income for the year 175,201 179,753 Attributable to: Equityholdersoftheparent 171,223 175,276Minorityinterest 3,978 4,477 175,201 179,753 Earnings per share attributable to the equity holders of the parent for the year: 7 (expressedincentspershare) -basic 11.2 11.5-diluted 11.2 11.5

Theaccompanyingnotesfrompartofthesefinancialstatements.

24

As of October 31, 2009(expressed in thousands of united States dollars)

Consolidated Balance Sheet

Notes 2009 2008 $ $ ASSETS CashandbalanceswithCentralBanks 8 425,629 488,810Duefrombanks 9 850,587 496,076Derivativefinancialinstruments 10 1,575 2,144Financialassetsatfairvaluethroughprofitorloss 11 — 536,217Other assets 12 45,536 59,934Taxationrecoverable 9,089 6,184Investmentsecurities 13 1,743,690 2,004,269Loansandadvancestocustomers 14 6,905,476 6,814,278Propertyandequipment 15 120,988 127,156Deferredtaxassets 16 12,987 15,768Retirementbenefitassets 17 45,470 44,805Intangibleassets 18 341,550 344,513 TOTAL ASSETS 10,502,577 10,940,154 LIABILITIES Derivativefinancialinstruments 10 87,084 55,580Customerdeposits 19 8,658,353 9,196,049Otherborrowedfunds 20 38,489 23,735Other liabilities 21 54,248 66,965Taxationpayable 9,072 14,031Deferredtaxliabilities 16 3,885 1,520Debtsecuritiesinissue 22 124,622 238,532Retirementbenefitobligations 17 8,055 7,947 TOTAL LIABILITIES 8,983,808 9,604,359 EQuITY ATTRIBuTABLE TO EQuITY HOLDERS OF THE PARENT Issuedcapital 23 1,117,349 1,117,349Treasuryshares 24 — (500)Reserves 25 (246,768) (371,997)Retainedearnings 620,353 565,889

1,490,934 1,310,741MINORITY INTEREST 27,835 25,054 TOTAL EQuITY 1,518,769 1,335,795 TOTAL LIABILITIES AND EQuITY 10,502,577 10,940,154

ApprovedbytheBoardofDirectorsonDecember10,2009

Michael K. Mansoor John D. OrrChairman ChiefExecutiveOfficer


25


Consolidated Statement of Changes in Equity

Attributable to equity holders of the Parent

Notes Issued Treasury Retained Minority Total capital shares Reserves earnngs interest equity $ $ $ $ $ $

Balance at October 31, 2007 1,117,349 (1,418) (300,248) 520,310 24,827 1,360,820 Foreigncurrencytranslationdifferences 25 — — 483 (6,533) (206) (6,256)Netchangeinavailable-for-saleinvestmentsecurities 25 — — (100,543) — (1,455) (101,998) Totalincomeandexpensefortheyearrecogniseddirectlyinequity — — (100,060) (6,533) (1,661) (108,254) Netincomefortheyear — — — 175,276 4,477 179,753 Totalincomeandexpensefortheyear — — (100,060) 168,743 2,816 71,499Transfertoreserves 25 — — 29,573 (29,573) — —Netdisposaloftreasuryshares 24 — 918 — — — 918Share-basedpaymentreserves 25 — — (1,262) — — (1,262)Equitydividends — — — (93,591) — (93,591)Dividendsofsubsidiaries — — — — (2,589) (2,589)

Balance at October 31, 2008 1,117,349 (500) (371,997) 565,889 25,054 1,335,795 Foreigncurrencytranslationdifferences 25 — — (13,317) — (450) (13,767)Netchangeinavailable-for-saleinvestmentsecurities 25 — — 111,573 — 1,311 112,884 Totalincomeandexpensefortheyearrecogniseddirectlyinequity — — 98,256 — 861 99,117 Netincomefortheyear — — — 171,223 3,978 175,201 Totalincomeandexpensefortheyear — — 98,256 171,223 4,839 274,318Transfertoreserves 25 — — 27,598 (27,598) — —Netdisposaloftreasuryshares 24 — 500 — — — 500Share-basedpaymentreserves 25 — — (625) — — (625)Equitydividends — — — (89,161) — (89,161)Dividendsofsubsidiaries — — — — (2,058) (2,058) Balance at October 31, 2009 1,117,349 — (246,768) 620,353 27,835 1,518,769


26

2009 2008 $ $Cash flows from operating activities Incomebeforetaxationandminorityinterest 202,182 201,973Loanlossimpairment 43,369 32,015Depreciationofpropertyandequipment 18,513 24,947Amortisationofintangibleassets 2,963 2,963Netgainsondisposalsofpropertyandequipment (946) (1,019)Netgainsondisposalsandredemptionofinvestmentsecurities (9,697) (380)Netgainsontherepaymentofdebtsecuritiesissued (17,648) —Nethedginglosses 5,062 6,425Share-basedpaymentreserve (625) (1,262)Interestincomeearnedoninvestmentsecurities (110,023) (109,030)Interestexpenseincurredonborrowedfundsanddebtsecurities 11,298 20,651

Cashflowsfromoperatingprofitsbeforechangesinoperatingassetsandliabilities 144,448 177,283 Changes in operating assets and liabilities: -net(increase)/decreaseinduefrombanks (328,843) 186,317-netdecreaseinfinancialassetsatfairvaluethroughprofitorloss 536,217 587,372-netincreaseinloansandadvancestocustomers (133,474) (766,922)-netdecreaseinotherassets 14,302 62,775-netdecreaseincustomerdeposits (537,696) (79,636)-netdecreaseinotherliabilities (16,510) (56,217)Incometaxespaid (33,000) (26,461)

Net cash (used in)/from operating activities (354,556) 84,511 Cash flows from investing activities Purchasesofpropertyandequipment (14,757) (17,504)Proceedsfromdisposalsofpropertyandequipment 3,358 2,422Purchasesofinvestmentsecurities (797,646) (1,220,334)Proceedsfromdisposalsandredemptionofinvestmentsecurities 1,191,691 1,587,186Interestincomereceivedoninvestmentsecurities 131,689 108,491

Net cash from investing activities 514,335 460,261 Cash flows from financing activities Netrepaymentsonotherborrowedfundsanddebtsecurities (80,555) (758,507)Interestexpensepaidonotherborrowedfundsanddebtsecurities (12,251) (32,194)Dividendspaidtoequityholdersoftheparent (89,161) (93,591)Dividendspaidtominorityinterest (2,058) (2,589)Netdisposaloftreasuryshares 500 918

Net cash used in financing activities (183,525) (885,963) Net decrease in cash and cash equivalents for the year (23,746) (341,191)Effectofexchangeratechangesoncashandcashequivalents (13,767) (6,256)Cash and cash equivalents, beginning of year 664,930 1,012,377 Cash and cash equivalents, end of year (note 8) 627,417 664,930



Consolidated Statement of Cash Flows

27

1. General information

FirstCaribbeanInternationalBankLimitedanditssubsidiaries(“theGroup”)areregisteredundertherelevantfinancialandcorporatelegislationsof17countriesintheCaribbeantocarryonbankingandotherrelatedactivities.TheGroup’sparent company, FirstCaribbean International Bank Limited (the Bank), is a company incorporated and domiciled inBarbadosatWarrens,St.Michael.TheultimateparentcompanyandcontrollingpartyoftheBankisCanadianImperialBankofCommerce(“CIBC”)whichholds91.4%oftheBank’sissuedsharesandisacompanyincorporatedinCanada.

TheBankhasaprimarylistingontheBarbadosstockexchange,withfurtherlistingsinTrinidad,JamaicaandtheEasternCaribbean.

2. Accounting policies

2.1 Basis of presentation

These consolidated financial statements are preparedunder thehistorical cost convention asmodifiedby therevaluationofavailable-for-saleinvestmentsecurities,financialassetsatfairvaluethroughtheprofitorlossandderivativefinancialinstruments.Thecarryingvalueofrecognisedassetsthatarehedgeditemsinfairvaluehedges,andotherwisecarriedatcost,areadjustedtorecordchangesinfairvalueattributabletotherisksthatarebeinghedged.TheconsolidatedfinancialstatementsarepresentedinUnitedStatesdollars,andallvaluesareroundedtothenearestthousand.

Statement of compliance

TheconsolidatedfinancialstatementsoftheGrouphavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS).

Basis of consolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheBankanditssubsidiariesfortheyearendedOctober31.ThefinancialstatementsofthesubsidiariesarepreparedforthesamereportingyearastheBank,usingconsistentaccountingpolicies.

Subsidiaryundertakings,whicharethosecompaniesinwhichtheBankdirectlyorindirectlyhasaninterestofmorethanonehalfofthevotingrightsorotherwisehaspowertoexercisecontrolovertheoperations,havebeenfullyconsolidated.Theprincipalsubsidiaryundertakingsaredisclosedinnote34.SubsidiariesareconsolidatedfromthedateonwhichtheeffectivecontrolistransferredtotheGroup.Theyarede-consolidatedfromthedatethatcontrolceases.Allinter-companytransactions,balancesandunrealisedsurplusesanddeficitsontransactionsandbalanceshavebeeneliminated.

ThepurchasemethodofaccountingisusedtoaccountfortheacquisitionofsubsidiariesbytheGroup.Thecostofanacquisitionismeasuredasthefairvalueoftheassetsgiven,equityinstrumentsissuedandliabilitiesincurredorassumedatthedateoftheexchange,pluscostsdirectlyattributabletotheacquisition.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesatthedateofacquisition,irrespectiveoftheextentofanyminorityinterest.TheexcessofthecostofacquisitionoverthefairvalueoftheGroup’sshareoftheidentifiablenetassetsacquiredisrecordedasgoodwill.

Ifthecostoftheacquisitionislessthanthefairvalueofthenetassetsofthesubsidiaryacquired,thedifferenceisrecogniseddirectlyintheincomestatement.

Minorityinterestsrepresenttheportionofprofitorlossandnetassetsnotowned,directlyorindirectly,bytheGroupandarepresentedseparatelyintheincomestatementandwithinequityintheconsolidatedbalancesheet,separatelyfromparentshareholders’equity.

October 31, 2009(expressed in thousands of united States dollars)

Notes to the Consolidated Financial Statements

28

2. Accounting policies (continued)

2.2 Significant accounting judgements and estimates

ThepreparationoffinancialstatementsinconformitywithIFRSrequiresmanagementtomakecertainsignificantestimates and judgements that affect amounts reported in the financial statements and accompanyingnotes.Actualresultscoulddifferfromtheseestimates.

Estimates and judgements are continually evaluatedandarebasedonhistorical experienceandother factors,

includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.Theestimatesandjudgementsthathaveasignificantriskofcausingmaterialadjustmentstothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

i) Fair value of financial instruments

Certainfinancialinstrumentsarerecordedatfairvalueusingvaluationtechniquesinwhichcurrentmarkettransactionsorobservablemarketdataarenotavailable. Their fairvalue isdeterminedusingavaluationmodelthathasbeentestedagainstpricesoforinputstoactualmarkettransactionsandusingtheGroup’sbestestimatesofthemostappropriatemodelassumptions.Modelsareadjustedtoreflectthespreadforbidandaskpricestoreflectcoststocloseoutpositions,counterpartycreditandliquidityspreadandlimitationsinthemodel.

ii) Impairment losses on loans and advances

TheGroupreviewsitsindividuallysignificantloansandadvancesateachbalancesheetdatetoassesswhetheranimpairmentlossshouldberecordedintheincomestatement.Inparticular,judgementbymanagementisrequiredintheestimationoftheamountandtimingoffuturecashflowswhendeterminingtheimpairmentloss.Inestimatingthesecashflows,theBankmakesjudgementsabouttheborrower’sfinancialsituationandthenetrealisablevalueofcollateral.Theseestimatesarebasedonassumptionsaboutanumberoffactorsandactualresultsmaydiffer,resultinginfuturechangestotheallowance.

Loansandadvancesthathavebeenassessedindividuallyandfoundnottobeimpairedandallindividuallyinsignificantloansandadvancesarethenassessedcollectively,ingroupsofassetswithsimilarriskcharacteristics,todeterminewhetherprovisionsshouldbemadedueto incurred lossevents forwhichthere isobjectiveevidencebutwhoseeffectsarenotyetevident.

Thecollectiveassessmenttakesaccountofdatafromtheloanportfoliosuchascreditquality,levelsofarrears,creditutilisation, loantocollateral ratios,concentrationsof risksandeconomicdata,countryriskandtheperformanceofdifferentindividualgroups.

iii) Retirement benefit obligations

Accountingforsomeretirementbenefitobligationsrequirestheuseofactuarialtechniquestomakeareliableestimateoftheamountofbenefitthatemployeeshaveearnedinreturnfortheirserviceinthecurrentandpriorperiods.Theseactuarialassumptionsarebasedonmanagement’sbestestimatesofthevariablesthatwilldetermine theultimatecostofprovidingpost-employmentbenefitsandcomprisebothdemographicandfinancialassumptions.Thisincludesassumptionsaboutdiscountrates,expectedratesofreturnonassets,futuresalaryincreases,mortalityratesandfuturepensionincreases.Variationsinthefinancialassumptionscancausematerialadjustmentsinfutureyears,ifitisdeterminedthattheactualexperiencedifferedfromtheestimate.

Notes to the Consolidated Financial StatementsOctober 31, 2009(expressed in thousands of united States dollars)

29


2.2 Significant accounting judgements and estimates (continued)

iv) Income taxes

TheGroupissubjecttotaxationinvariousjurisdictionsandsignificantestimatesarerequiredindeterminingtheprovisionforincometaxes.Wherethefinaltaxoutcomeisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpacttheincometaxanddeferredtaxprovisionsintheperiodinwhichsuchdeterminationismade.

Deferredtaxassetsarerecognisedforallunusedtaxlossestotheextentthatitisprobablethattaxableprofitswillbeavailableagainstwhichthelossescanbeutilised.Management’sjudgementisrequiredtodeterminetheamountofthedeferredtaxassetthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.

v) Impairment of available-for-sale investments

Management makes judgements at each balance sheet date to determine whether available-for-saleinvestments are impaired. These investments are impaired when the carrying value is greater than therecoverableamountandthereisobjectiveevidenceofimpairment.

vi) Goodwill

TheGroup’s financial statements include goodwill arising from acquisitions. In accordancewith IFRS 3,goodwill is reviewed for impairment annuallyusing the“value inuse”method. This requires theuseofestimates fordeterminationof futurecashflowsexpectedtoarise fromeachcash-generatingunitandanappropriatediscountratetocalculatepresentvalue.

2.3 Adoption of new accounting policies

The accounting policies adopted are consistentwith those used in the previous financial year except for theadoptionofthefollowingstandards,amendmentsandinterpretations.AdoptionoftheserevisedstandardsandinterpretationsdidnothaveanyeffectonthefinancialperformanceorpositionoftheGroup.

IFRIC13CustomerLoyaltyProgrammes

IFRIC14IAS19–TheLimitofaDefinedBenefitAsset,MinimumFundingRequirementsandtheirInteraction

IFRIC16HedgesofaNetInvestmentinaForeignOperation

2.4 Summary of significant accounting policies

Theprincipalaccountingpoliciesappliedinthepreparationoftheseconsolidatedfinancialstatementsaresetoutbelow.

(1) Foreign currency translation

ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).ThefunctionalcurrencyoftheBankisBarbadosdollars,however,theseconsolidatedfinancialstatementsarepresentedinUnitedStatesdollars(“thepresentationcurrency”)asthisisthesinglelargestcurrencyofusethroughouttheGroupandisuniversallyacceptedandrecognisedinalltheterritoriesinwhichtheGroupoperates.


30


2.4 Summary of significant accounting policies (continued)

(1) Foreign currency translation (continued)

(i) Transactions and balances Monetary assets and liabilities denominated in foreign currencies are translated into the functional

currencyatratesprevailingatthedateofthefinancialstatementsandnon-monetaryassetsandliabilitiesaretranslatedathistoricrates.Revenueandexpensesdenominatedinforeigncurrenciesaretranslatedinto the Bank’s functional currency and then converted to theGroup’s presentation currency usingprevailingaveragemonthlyexchangerates.Realisedandunrealisedgainsandlossesonforeigncurrencypositionsarereportedinincomeofthecurrentyear.Translationdifferencesonnon-monetaryitems,suchasequitiesclassifiedasavailable-for-salefinancialassets,areincludedintheavailable-for-salerevaluationreserveinequity.

(ii) Group companies TheresultsandfinancialpositionofalltheGroupentitiesthathaveafunctionalcurrencydifferentfrom

thepresentationcurrencyaretranslatedintothepresentationcurrencyasfollows:

(a) Assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateatthedateofthebalancesheet.

(b) Incomeandexpensesforeachincomestatementaretranslatedataverageexchangerates(unlessthis average is not a reasonable approximation of the cumulative effect of the rates prevailingonthe transactiondates, inwhichcase incomeandexpensesare translatedat thedatesof thetransactions);and

(c) Allresultingexchangedifferencesarerecognisedasaseparatecomponentofequity.

Onconsolidation,exchangedifferencesarisingfromthetranslationofthenetinvestmentinforeignoperations, and of borrowings and other currency instruments designated as hedges of suchinvestments,aretakentoequity.Whenaforeignoperationissold,suchexchangedifferencesarerecognisedintheincomestatementaspartofthegainorlossonsale.

(2) Derivative financial instruments and hedge accounting

Derivativesareinitiallyrecognisedinthebalancesheetattheirfairvalueatthetradedate.Fairvaluesareobtainedfromdiscountedcashflowmodels,usingquotedmarketinterestrates.Allderivativesarecarriedasassetswhenfairvalueispositiveandasliabilitieswhenfairvalueisnegative.

Themethodofrecognisingtheresultingfairvaluegainorlossdependsonwhetherthederivativeisdesignatedasatradingorhedginginstrument,andifso,thenatureoftheitembeinghedged.

TheGroupdesignatescertainderivativesaseither:(a)hedgesofthefairvalueofrecognisedassetsorliabilities(fairvaluehedge);or(b)hedgesofhighlyprobablecashflowsattributabletoarecognisedassetorliability(cashflowhedge).Hedgeaccountingisusedforderivativesdesignatedinthiswayprovidedcertaincriteriaaremet.

TheGroup’scriteriaforaderivativeinstrumenttobeaccountedforasahedgeinclude:(i) formal documentation of the hedging instrument, hedged item, hedging objective, strategy and

relationship,attheinceptionofthetransaction;(ii) thehedgedocumentationshowsthatit isexpectedtobehighlyeffectiveinoffsettingtheriskinthe

hedgeditemthroughoutthereportingperiod;and(iii) the hedge is highly effective on an ongoing basis and determined to have been highly effective

throughoutthefinancialperiodsforwhichthehedgewasdesignated.(iv) forcashflowhedges,aforecasttransactionthatisthesubjectofthehedgemustbehighlyprobableand

mustpresentanexposuretovariationincashflowsthatcouldultimatelyaffecttheincomestatement.


31



(2) Derivative financial instruments and hedge accounting (continued)

(a) Fairvaluehedge Changesinthefairvalueoftheeffectiveportionsofderivativesthataredesignatedandqualifyasfair

valuehedgesandthatprovetobehighlyeffectiveinrelationtohedgedrisk,arerecordedintheincomestatement, alongwith thecorrespondingchange in fair valueof thehedgedassetor liability that isattributabletothatspecifichedgedrisk.

Ifthehedgenolongermeetsthecriteriaforhedgeaccounting,anadjustmenttothecarryingamountofahedgedinterest-bearingfinancialinstrumentisamortisedtonetprofitorlossovertheremainingperiodtomaturity.

(b) Cashflowhedge Theeffectiveportionofchangesinthefairvalueofderivativesthataredesignatedandqualifyascash

flowhedgesarerecognisedinequity.Thegainorlossrelatingtotheineffectiveportionisrecognisedimmediatelyintheincomestatement.

Amountsaccumulatedinequityarerecycledtotheincomestatementintheperiodsinwhichthehedgeditemwillaffectprofitorloss(forexample,whentheforecastsalethatishedgedtakesplace).

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria forhedgeaccounting,anycumulativegainor lossexisting inequityat that time remains inequityandisrecognisedwhentheforecasttransactionisultimatelyrecognisedinthe incomestatement. Whenaforecasttransactionisnolongerexpectedtooccur,thecumulativegainorlossthatwasreportedinequityisimmediatelytransferredtotheincomestatement.

Changesinthefairvalueofderivativesheld-for-tradingareincludedinnettradingincomeorlossesintheincomestatement.

(3) Interest income and expense

Interestincomeandexpensearerecognisedintheincomestatementforallinterestbearinginstrumentsonanaccrualbasisusingtheeffective interestyieldmethodbasedontheactualpurchasepriceorestimatedrecoverable amount. Interest income includes coupons earned on fixed income investment and tradingsecuritiesandaccrueddiscountsandpremiumsontreasurybillsandotherdiscountedinstruments.

Onceafinancialassetoragroupofsimilarfinancialassetshasbeenwrittendownasaresultofanimpairmentloss, interest income is recognised using the original effective interest rate for the purpose ofmeasuringimpairmentloss.

(4) Fee and commission income

Feesandcommissionsaregenerallyrecognisedonanaccrualbasiswhentheservicehasbeenprovided.Loanoriginationfeesforloans,whichhaveahighprobabilityofbeingdrawndown,aredeferred(togetherwithrelateddirectcosts)andrecognisedasanadjustmenttotheeffectiveinterestyieldontheloan.Commissionandfeesarisingfromnegotiating,orparticipatinginthenegotiationofatransactionforathirdparty,suchastheacquisitionof loans,sharesorothersecuritiesorthepurchaseorsaleofbusinesses,arerecognisedoncompletionof theunderlying transaction. Portfolioandothermanagementadvisoryand service feesare recognisedbasedon the applicable service contracts. Assetmanagement fees related to investmentfundsarerecognisedproportionatelyovertheperiodtheserviceisprovided.Thesameprincipleisappliedforwealthmanagement, financial planning and custody services that are continuously provided over anextendedperiodoftime.


32



(5) Customer loyalty programmes

TheGroupoffersacustomerpointsprogrammethroughitsCreditCardproducts.Aportionofthenetfeerevenuesaredeferredinrelationtoawardcreditsundercustomerloyaltyprogrammesasaseparatelyidentifiablerevenuecomponent.Theamountdeferredrepresentsthefairvalueoftheawardcreditsandisrecognisedwhentheawardsareutilisedorexpire.

(6) Financial instruments

TheGroupclassifiesitsfinancialassetsintothefollowingcategories:

(i) Financialassetsatfairvaluethroughprofitorloss;(ii) Loansandreceivables;or(iii) Available-for-salefinancialassets.

Managementdeterminestheclassificationofitsinvestmentsatinitialrecognition.

(i) Financialassetsatfairvaluethroughprofitorloss Thiscategorycomprisesfinancialassetsheldfortrading.Afinancialassetisclassifiedinthiscategoryif

acquiredprincipallyforthepurposeofsellingintheshorttermorifsodesignatedbymanagement.

Managementmaydesignateafinancialassetatfairvaluethroughprofitorlosswhencertaincriteriaaremet,anddesignationisdeterminedonaninstrumentbyinstrumentbasis:• Thedesignationeliminatesorsignificantlyreducestheinconsistenttreatmentthatwouldotherwisearisefrommeasuringtheassetsorliabilitiesorrecognisinggainsorlossesonthemonadifferentbasis;or

• Theassetsarepartofagroupoffinancialassetswhicharemanagedandtheirperformanceevaluatedonafairvaluebasis,inaccordancewithadocumentedriskmanagementorinvestmentstrategy;or

• Thefinancial instrumentcontainsoneormoreembeddedderivativeswhichsignificantlymodify thecashflowsthatotherwisewouldberequiredbythecontract.

(ii) Loansandreceivables Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenot

quotedinanactivemarket.

(iii) Available-for-salefinancialassets Available-for-salefinancialassetsarethoseintendedtobeheldforanindefiniteperiodoftime,whichmay

besoldinresponsetoneedsforliquidityorchangesininterestrates,exchangeratesorequityprices.

Allpurchasesandsalesoffinancialassetsat fairvalue throughprofitor lossandavailable-for-sale thatrequiredeliverywithin the time frameestablishedby regulationormarket convention (“regularway”purchasesandsales)arerecognisedatsettlementdate,whichisthedatethatanassetisdeliveredtoorbytheGroup.Otherwisesuchtransactionsaretreatedasderivativesuntilsettlementoccurs.Loansandreceivablesarerecognisedwhencashisadvancedtoborrowers.

Financial assets, not carried at fair value throughprofit or loss, are initially recognised at fair value plustransactioncosts.FinancialassetsarederecognisedwhentherightstoreceivethecashflowsfromthefinancialassetshaveexpiredorwheretheGrouphastransferredsubstantiallyallrisksandrewardsofownership.

Available-for-salefinancialassetsandfinancialassetsatfairvaluethroughprofitorlossaresubsequentlyre-measuredatfairvaluebasedonquotedbidpricesoramountsderivedfromcashflowmodels.Loansandreceivablesarecarriedatamortisedcostusingtheeffectiveinterestyieldmethod,lessanyprovisionsforimpairment.Unrealisedgainsandlossesarisingfromchangesinthefairvalueofsecuritiesclassifiedasavailable-for-salearerecognisedinequity.Whenthesecuritiesaredisposedoforimpaired,therelatedaccumulated fair value adjustments are included in the income statement as gains and losses frominvestmentsecurities.


33



(6) Financial instruments (continued)

(iii) Available-for-salefinancialassets(continued) Unquotedequityinstrumentsforwhichfairvaluescannotbemeasuredreliablyarerecognisedatcost

lessimpairment.

Allgainsandlossesfromdisposalsand/orchangesinthefairvalueoffinancialassetsatfairvaluethroughprofitor loss andderivativesheld for tradingare included inoperating incomeasnet tradinggainsorlosses.Allgainsandlossesfromdisposalsof investmentsecuritiesavailableforsaleareincludedinoperatingincomeasnetinvestmentsecuritiesgainsorlosses.Wherecertainfinancialassetsarehedgedand there is ineffectiveness, this is included in operating income as net hedge relationship losses.Dividendsarerecordedontheaccrualbasiswhendeclaredandare includedin investmentsecuritiesinterestandsimilarincome.

(7) Offsetting financial instruments

Financialassetsandliabilitiesareoffsetandthenetamountreportedinthebalancesheetwhenthereisalegallyenforceablerighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasis,orrealisetheassetandsettletheliabilitysimultaneously.

(8) Sale and repurchase agreements

Securitiessoldsubjecttolinkedrepurchaseagreements(“repos”)areretainedinthefinancialstatementsasinvestmentsecuritiesandthecounterpartyliabilityisincludedinotherborrowedfunds.Securitiespurchasedunderagreementstoresellarerecordedasloansandadvancestootherbanksorcustomersasappropriate.Thedifferencebetweensaleandrepurchasepriceistreatedasinterestandaccruedoverthelifeofrepurchaseagreementsusingtheeffectiveinterestyieldmethod.

(9) Impairment of financial assets

TheGroupassessesateachbalancesheetdatewhetherthereisobjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpaired.Afinancialassetoragroupoffinancialassetsisimpairedandimpairmentlossesareincurredif,andonlyif,thereisobjectiveevidenceofimpairmentasaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionoftheasset(a“lossevent”)andthatlossevent(orevents)hasanimpactonthefuturecashflowsofthefinancialassetorgroupoffinancialassetsthatcanbereliablyestimated.ObjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpairedincludesobservabledatathatcomestotheattentionoftheGroupaboutthefollowinglossevents:

(i) significantfinancialdifficultyoftheissuerorobligor;(ii) abreachofcontract,suchasadefaultordelinquencyininterestorprincipalpayments;(iii) theGroupgrantingtoaborrower, foreconomicor legal reasons relatingto theborrower’sfinancial

difficulty,aconcessionthatthelenderwouldnototherwiseconsider;(iv) itbecomingprobablethattheborrowerwillenterbankruptcyorotherfinancialreorganisation;(v) thedisappearanceofanactivemarketforthatfinancialassetbecauseoffinancialdifficulties;or(vi) observabledataindicatingthatthereisameasurabledecreaseintheestimatedfuturecashflowsfroma

groupoffinancialassetssincetheinitialrecognitionofthoseassets,althoughthedecreasecannotyetbeidentifiedwiththeindividualfinancialassetsinthegroup,including:

-adversechangesinthepaymentstatusofborrowersinthegroup;or -nationalorlocaleconomicconditionsthatcorrelatewithdefaultontheassetsinthegroup.


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(9) Impairment of financial assets (continued)

Ifthereisobjectiveevidencethatanimpairmentlossonloansandadvancescarriedatamortisedcosthasbeenincurred,theamountofthelossismeasuredasthedifferencebetweenthecarryingamountandtherecoverableamount,beingtheestimatedpresentvalueofexpectedcashflows,includingamountsrecoverablefromguaranteesandcollateral,discountedbasedontheoriginaleffectiveinterestrate.

When a loan is uncollectible, it is written off against the related provisions for impairment; subsequentrecoveriesarecreditedtothestatementofincomeandincludedinloanlossimpairment.Iftheamountoftheimpairmentsubsequentlydecreasesduetoaneventoccurringafterthewrite-down,thereleaseoftheprovisioniscreditedtothestatementofincomeandincludedinloanlossimpairment.

IncircumstanceswhereCentralBankguidelinesandregulatory rules requireprovisions inexcessof thosecalculatedunderIFRS,thedifferenceisdisclosedasanappropriationofretainedearningsandisincludedinanon-distributablegeneralbankingreserve.

(10) Intangible assets

(i) Goodwill Goodwillrepresentstheexcessofthecostofanacquisitionoverthefairvalueofthenet identifiable

assetsoftheacquiredsubsidiaryundertakingatthedateofacquisitionandisreportedinthebalancesheet as an intangible asset. Goodwill is tested annually for impairment and carried at cost lessaccumulatedimpairmentlosses.Goodwillisallocatedtothelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits)forthepurposeofimpairmenttesting.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingvalueexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.

(ii) Customer-relatedintangibleassets Customer-related intangible assets represent the fair value of each customer relationship acquired

in a business combination, as of the acquisition date, whichmet the contractual-legal criterion foridentificationasanintangibleassetinthebalancesheetseparatedfromgoodwill.Thefairvalueofthecustomerrelationshipsisamortisedonastraightlinebasisoveritsexpectedusefullifeofsixyears.Ateachreportingdate,anassessmentismadetodeterminewhetherthereareanyindicationsofimpairment,andifsuchanindicationexists,thentherecoverableamountshallbeestimated.Ifnoindicatorsexistthenthetestforimpairmentisnotnecessary.

(11) Property and equipment

Allpropertyandequipmentarestatedathistoricalcostlessaccumulateddepreciation,withtheexceptionoflandwhichisnotdepreciated.Historicalcostincludesexpendituresthataredirectlyattributabletotheacquisitionoftheitems.Landandbuildingscomprisemainlybranchesandoffices.

Subsequent costs are included in the asset’s carrying amount or are recognised as a separate asset, asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancearechargedtothestatementofincomeduringthefinancialperiodinwhichtheyareincurred.

Depreciationonallpropertyandequipment iscomputedonthestraight linemethodatratesconsideredadequatetowrite-offthecostofdepreciableassets,lesssalvage,overtheirusefullives.

Theannualratesusedare:

-Buildings 2½% -Leaseholdimprovements 10%oroverthelifeofthelease -Equipment,furnitureandvehicles 20–50%


35



(11) Property and equipment (continued)

Assets that are subject to depreciation are reviewed for impairment whenever events or changes incircumstances indicate that thecarryingamountmaynotbe recoverable.Where thecarryingamountofanassetisgreaterthanitsestimatedrecoverableamount,itiswrittendownimmediatelytoitsrecoverableamount.Theasset’srecoverableamountisthehigheroftheasset’sfairvaluelesscoststosellandthevalueinuse.

Gainsandlossesondisposalofpropertyandequipmentaredeterminedbyreferencetoitscarryingamountandaretakenintoaccountindeterminingnetincome.

(12) Leases

Whenassetsareheldsubjecttoafinancelease,thepresentvalueoftheleasepaymentsisrecognisedasareceivable.Thedifferencebetweenthegrossreceivableandthepresentvalueofthereceivableisrecognisedasunearnedfinanceincome.Leaseincomeisrecognisedoverthetermoftheleaseusingthenetinvestmentmethod,whichreflectsaconstantperiodicrateofreturn.

(13) Cash and cash equivalents

Forthepurposesofthecashflowstatement,cashandcashequivalentscomprisebalanceswithlessthan90daysmaturityfromthedateofacquisitionincludingcashbalances,non-restricteddepositswithCentralBanks(excludingmandatoryreservedeposits),treasurybillsandothermoneymarketplacements.

(14) Provisions

ProvisionsarerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasaresultofpastevents,itismorethanlikelythatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountoftheobligationcanbemade.

(15) Retirement benefit obligations

(i) Pensionobligations TheGroup operates a number of pension plans, the assets ofwhich are generally held in separate

trustee-administered funds. Thepensionplans aregenerally fundedbypayments from the relevantGroupcompanies, takingaccountof the recommendationsof independentqualifiedactuaries. TheGrouphasbothdefinedbenefitplansanddefinedcontributionplans.Adefinedbenefitplanisapensionplanthatdefinesanamountofpensionbenefittobeprovided,usuallyasafunctionofoneormorefactors suchasage,yearsof serviceorcompensation.Adefinedcontributionplan isapensionplanunderwhichtheGrouppaysfixedcontributionsintoaseparateentity(afund)andwillhavenolegalorconstructiveobligationstopayfurthercontributionsifthefunddoesnotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeserviceinthecurrentandpriorperiods.

Theliabilityrecognisedinthebalancesheetinrespectofdefinedbenefitpensionplansisthepresentvalueof thedefinedbenefitobligationat thebalancesheetdateminus the fairvalueofplanassets,togetherwithadjustments forunrecognisedactuarialgains/lossesandpast servicecost.Thedefinedbenefit obligation is calculated annually by independent actuaries using the projected unit creditmethod.Thepresentvalueofthedefinedbenefitobligationisdeterminedbytheestimatedfuturecashoutflowsusinginterestratesofgovernmentsecurities,whichhavetermstomaturityapproximatingthetermsoftherelatedliability.Mostofthepensionplansarefinalsalaryplansandthechargeforsuchpensionplans,representingthenetperiodicpensioncostlessemployeecontributions,isincludedinstaffcosts.


36



(15) Retirement benefit obligations (continued)

(i) Pensionobligations(continued) Actuarialgainsand lossesarising fromexperienceadjustmentsandchanges inactuarialassumptions

are chargedor credited to incomeover the expected average remaining service lives of the relatedemployees.Pastservicecostsarerecognisedimmediatelyinincome,unlessthechangestothepensionplanareconditionalontheemployeesremaininginserviceforaspecifiedperiodoftime(thevestingperiod).Inthiscase,pastservicecostsareamortisedonastraight-linebasisoverthevestingperiod.

For defined contributionplans, theGroupmakes contributions topublicly or privately administeredpensioninsuranceplansonamandatory,contractualorvoluntarybasis.Oncethecontributionshavebeenpaid, theGrouphasno furtherpaymentobligations. The regular contributions constitutenetperiodiccostsfortheyearinwhichtheyaredueandassuchareincludedinstaffcosts.TheGroup’scontributionstodefinedcontributionpensionplansarechargedtothestatementofincomeintheyeartowhichtheyrelate.

(ii) Otherpostretirementobligations SomeGroupcompaniesprovidepost-retirementhealthcarebenefitstotheirretirees.Theentitlement

tothesebenefitsisusuallybasedontheemployeeremaininginserviceuptoretirementageandthecompletionofaminimumserviceperiod.Theexpectedcostsofthesebenefitsareaccruedovertheperiodofemployment,usingamethodologysimilartothatfordefinedbenefitpensionplans.Actuarialgainsandlossesarisingfromexperienceadjustmentsandchangesinactuarialassumptionsarechargedorcreditedtoincomeovertheexpectedaverageremainingservicelivesoftherelatedemployees.Theseobligationsarevaluedannuallybyindependentqualifiedactuaries.

(16) Deferred tax

Deferredtaxisprovidedinfull,usingtheliabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.

The principal temporary differences arise from depreciation on property and equipment, revaluation ofcertainfinancialassetsandliabilities,provisionsforpensionsandtaxlossescarriedforward;and,inrelationtoacquisitions,onthedifferencebetweenthefairvaluesofthenetassetsacquiredandtheirtaxbase.Currentlyenactedtaxratesareusedtodeterminedeferredtaxes.

Taxpayableonprofits,basedontheapplicabletaxlawineachjurisdiction,isrecognisedasanexpenseintheperiodinwhichprofitsarise.Deferredtaxassetsrelatingtothecarry-forwardofunusedtaxlossesarerecognisedtotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainstwhichthetaxlossescanbeutilised.

Deferred tax related to fair value re-measurement of available-for-sale investments, which is charged orcrediteddirectlytoequity,isalsocreditedorchargeddirectlytoequityandissubsequentlyrecognisedintheincomestatementtogetherwiththerealisedgainorloss.

(17) Borrowings

Borrowingsarerecognisedinitiallyatfairvaluelesstransactioncostsandaresubsequentlystatedatamortisedcostandanydifferencebetweennetproceedsandtheredemptionvalueisrecognisedinthestatementofincomeovertheperiodoftheborrowings,usingtheeffectiveinterestmethod.


37



(18) Share capital

(i) Shareissuecosts Sharesissuedforcashareaccountedforattheissuepricelessanytransactioncostsassociatedwiththe

issue.Sharesissuedasconsiderationforthepurchaseofassets,orabusiness,arerecordedatthemarketpriceonthedateoftheissue.

(ii) Dividendsoncommonshares Dividendsoncommonsharesarerecognisedinequityintheperiodinwhichtheyaredeclared.Dividends

fortheyearthataredeclaredafterthebalancesheetdatearenotreflectedinthesefinancialstatements.

(iii) Treasuryshares WheretheBankorothermembersoftheconsolidatedGrouppurchasetheBank’sequitysharecapital,

theconsiderationpaid isdeducted fromtotalequityattributable to theequityholdersof theparentastreasurysharesuntiltheyarecancelled.Wheresuchsharesaresubsequentlysoldorreissued,anyconsiderationreceivedisincludedinequityattributabletotheequityholdersoftheparent.

(19) Earnings per share

Basicearningspershareiscalculatedbydividingthenetprofitattributabletoequityholdersoftheparentbytheweightedaveragenumberofcommonshares(excludingtreasuryshares)outstandingduringtheyear.Forthedilutedearningspershare,theweightedaveragenumberofcommonsharesinissueisadjustedtoassumeconversionofalldilutivepotentialshares.

(20) Share-based payments to employees

TheGroupengagesinequitysettledshare-basedpaymenttransactionsinrespectofservicesrenderedfromcertainofitsemployees.Thecostoftheservicesreceivedismeasuredbyreferencetothefairvalueofthesharesorshareoptionsgranted.Thecostrelatedtothesharesorshareoptionsgrantedisrecognisedintheincomestatementovertheperiodthattheservicesoftheemployeesarereceived,whichisthevestingperiod,withacorrespondingcredittoequity.

(21) Fiduciary activities

TheGroupcommonlyactsastrusteesandinotherfiduciarycapacitiesthatresultintheholdingorplacingofassetsonbehalfofindividuals,trusts,retirementbenefitplansandotherinstitutions.Theseassetsandincomearisingthereonareexcludedfromthesefinancialstatements,astheyarenotassetsoftheGroup.

(22) Segment reporting

Abusinesssegmentisagroupofassetsandoperationsengagedinprovidingproductsandservicesthataresubjecttorisksandreturnsthataredifferentfromthoseofotherbusinesssegments.Ageographicalsegmentisengagedinprovidingproductsorserviceswithinaparticulareconomicenvironmentthataresubjecttorisksandreturnsthataredifferentfromthoseofsegmentsoperatinginothereconomicenvironments.Segmentswithamajorityofrevenueearnedfromexternalcustomers,andwhoserevenue,resultsorassetsare10%ormoreofallthesegments,arereportedseparately.

(23) Comparatives Wherenecessary, comparativefigureshavebeenadjusted tocomplywithchanges inpresentation in the

currentyear.


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2.5 Future changes in accounting polices

Certainnewstandards,andamendmentstoexistingstandardshavebeenpublishedthataremandatoryfortheGroup’saccountingperiodsbeginningonorafterNovember1,2009butwhichtheGrouphasnotearlyadopted,asfollows:

• IAS1 (Revised),PresentationofFinancialStatements• IAS23(Revised),BorrowingCosts• IAS24(Revised),RelatedParties• IAS27(Revised),ConsolidatedandSeparateFinancialStatements• IAS28(Revised),InvestmentinAssociates• IAS31(Revised),InterestsinJointVentures• IAS32(Revised),FinancialInstruments:Presentation• IAS39(Revised),FinancialInstruments:RecognitionandMeasurement• IFRS2 (Revised),Share-BasedPayment• IFRS3 (Revised),BusinessCombinations• IFRS7Amendments,ImprovingDisclosuresaboutFinancialInstruments• IFRS8OperatingSegments• IFRIC9andIAS39Amendments,EmbeddedDerivatives• IFRIC17DistributionofNon-CashAssetstoOwners• IFRIC18TransfersofAssetsfromCustomers

IAS1,IAS23,IFRS7andIFRS8areexpectedtoaffectthepresentationanddisclosurerequirementsfortheGroup.AllotherstandardsandamendmentsarenotexpectedtohaveanyimpactontheGroup.

Additionally,inMay2008andApril2009,theInternationalAccountingStandardsBoardissued“ImprovementstoIFRSs”,aspartofitsannualimprovementsproject,andavehicleformakingnon-urgentbutnecessaryamendmentstovariousIFRSs.TheseamendmentsprimarilybecomeeffectiveforannualperiodsbeginningonorafterJanuary1,2009.Managementhasdecidednottoearlyadopttheamendmentsanddoesnotexpecttheirapplicationtohaveasignificanteffect.

3. Net interest income

2009 2008 $ $Interest and similar income Cash&shorttermfundsandduefrombanks 12,789 62,101Investmentsecurities 110,023 109,030Tradingsecurities 5,101 31,394Loansandadvancestocustomers 486,899 520,446 614,812 722,971Interest and similar expense Customerdeposits 151,750 240,754Debtsecuritiesinissue 7,640 16,483Borrowedfundsandother 21,927 7,447 181,317 264,684 433,495 458,287


39

4. Operating income 2009 2008 $ $ Netfeeandcommissionincome 68,991 69,684Foreignexchangecommissions 44,378 55,185Foreignexchangerevaluationnetgains/(losses) 707 (4,601)Nettradinglosses (9,441) (28,243)Netinvestmentsecuritiesgains 10,685 380Nethedginglosses (5,062) (6,425)Gainsonrepaymentofdebtsecurities(note22) 17,648 —Otheroperatingincome 6,831 6,276 134,737 92,256

Net trading losseshave arisen fromeitherdisposals and/or changes in the fair value, onboth trading securities andderivativesheldfortrading.

Netinvestmentsecuritiesgainshavearisenfromdisposalsofinvestmentsecuritiesheldasavailable-for-sale.

Nethedginglosseshavearisenfromthedifferencebetweenthechangesinfairvalueofhedgeditemsinrespectofthehedgedriskagainstchangesinfairvalueoftheassociatedhedginginstruments. Analysis of net fee and commission income:

2009 2008 $ $Fee and commission income: Underwritingfeesandcommissions 1,725 2,406Depositservicesfeesandcommissions 40,202 39,535Creditservicesfeesandcommissions 10,757 10,632Cardservicesnetfeesandcommissions 15,778 15,544Otherfeesandcommissions 529 1,567 68,991 69,684

5. Operating expenses

2009 2008 $ $ Staffcosts 180,175 166,301Propertyandequipmentexpenses 38,969 42,208Depreciation(note15) 18,513 24,947Otheroperatingexpenses 82,061 80,136 319,718 313,592Analysis of staff costs: Wagesandsalaries 143,071 138,981Pensioncosts-definedcontributionplans(note17) 4,383 3,915Pensioncosts-definedbenefitplans(note17) 6,322 1,910Postretirementmedicalbenefitscharge/(income)(note17) 365 (70)Othershareandcash-basedbenefits 2,973 2,716Otherstaffrelatedcosts 23,061 18,849 180,175 166,301


40

5. Operating expenses (continued)

2009 2008 $ $ Analysis of other operating expenses: Professionalfees 14,100 14,715Advertisingandmarketing 5,773 7,642Businessdevelopmentandtravel 4,782 6,216Communications 9,423 6,715Profitonsaleofpropertyandequipment (946) (1,019)Other 48,929 45,867 82,061 80,136

6. Taxation 2009 2008 $ $Thecomponentsofincometaxexpensefortheyearare:

Currenttax 26,963 26,541Deferredtax 1,845 (4,508)Prioryeartax (1,827) 187 26,981 22,220

TaxontheGroup’sincomebeforetaxdiffersfromthetheoreticalamountthatwouldariseusingtheBarbadosstatutorytaxrateasfollows:

2009 2008 $ $ Incomebeforetaxationandminorityinterest 202,182 201,973 Taxcalculatedatthestatutorytaxrateof25% 50,546 50,493Effectofdifferenttaxratesinothercountries (41,131) (41,486)Effectofchangeintaxrate 96 24Effectofincomenotsubjecttotax (8,133) (9,347)Effectofincomesubjecttotaxat12.5% (1,481) (1,509)Underprovisionofprioryeardeferredtaxliability 1,686 905Over/(under)provisionofcurrentyearcorporationtaxliability 1,122 (111)Movementindeferredtaxassetnotrecognised 23,122 21,896Effectofexpensesnotdeductiblefortaxpurposes 1,154 1,355 26,981 22,220


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7. Earnings per share

Thefollowingtableshowstheincomeandsharedatausedinthebasicanddilutiveearningspersharecalculations:

Basic earnings per share 2009 2008 $ $ Netincomeattributabletoequityholdersoftheparent 171,223 175,276 Weightedaveragenumberofcommonsharesforbasicearningspershare(thousands) 1,525,117 1,524,848 Basicearningspershare(expressedincentspershare) 11.2 11.5

2009 2008 $ $Diluted earnings per share Netincomeattributabletoequityholdersoftheparent 171,223 175,276 Weightedaveragenumberofcommonsharesfordilutedearningspershare(thousands) 1,525,617 1,525,639 Dilutedearningspershare(expressedincentspershare) 11.2 11.5

Theshareoptionsareconsideredtobedilutivepotentialcommonshares(note27).

8. Cash and balances with Central Banks

2009 2008 $ $ Cash 69,457 129,910DepositswithCentralBanks-interestbearing 68,114 93,179DepositswithCentralBanks-non-interestbearing 288,058 265,721 CashandbalanceswithCentralBanks 425,629 488,810 Less:MandatoryreservedepositswithCentralBanks (252,140) (232,824) Includedincashandcashequivalentsasperbelow 173,489 255,986

MandatoryreservedepositswithCentralBanksrepresenttheGroup’sregulatoryrequirementtomaintainapercentageofdepositliabilitiesascashordepositswithCentralBanks.ThesefundsarenotavailabletofinancetheGroup’sday-to-dayoperationsandassuch,areexcludedfromcashresourcestoarriveatcashandcashequivalents.

Cash and cash equivalents 2009 2008 $ $ CashandbalanceswithCentralBanksasperabove 173,489 255,986Duefrombanks(note9) 453,928 408,944 627,417 664,930


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9. Due from banks 2009 2008 $ $ Includedincashandcashequivalents(note8) 453,928 408,944Greaterthan90daysmaturityfromdateofacquisition 396,659 87,132 850,587 496,076

Theaverageeffectiveyieldontheseamountsduringtheyearwas2.5%(2008–2.9%).

10. Derivative financial instruments

Thetablebelowshowsthefairvaluesofderivativefinancialinstrumentsrecordedasassetsorliabilities,togetherwiththeirnotionalamounts.Thenotionalamount,recordedgross,istheamountofaderivative’sunderlyingasset,referencerateorindexthatisthebasisuponwhichchangesinthevalueofderivativesaremeasured.

October 31, 2009 Notional amount Assets Liabilities $ $ $ Interestrateswaps 571,876 197 (80,499)Foreignexchangeforwards 329,414 1,378 (6,585) 1,575 (87,084)

October 31, 2008 Notional amount Assets Liabilities $ $ $

Interestrateswaps 620,210 1,966 (48,387)Foreignexchangeforwards 205,720 178 (7,193) 2,144 (55,580)

AsofOctober31,2009,theBankhaspositionsinthefollowingtypesofderivatives:

InterestrateswapsInterestrateswapsarecontractualagreementsbetweentwopartiestoexchangemovementsininterestrates.

Foreignexchangeforwards Foreignexchangeforwardsarecontractualagreementstobuyorsellaspecifiedamountofforeigncurrencyatafuturedateatanexchangeratefixedatinceptionofthecontract.

DerivativefinancialinstrumentsheldorissuedforhedgingpurposesAs part of its asset and liabilitymanagement, the Bank uses derivatives for hedging purposes in order to reduce itsexposuretospecifiedrisks.FairvaluehedgesareusedbytheGrouptoprotectitagainstchangesinthefairvalueofspecificfinancialassetsduetomovementsininterestrates.Thefinancialassetshedgedforinterestrateriskincludefixedinterestrateloansandavailable-for-saledebtsecuritiesandarehedgedbyinterestrateswaps.

Duringtheyear,theGrouprecognisedlossesoneffectivehedgesof$5,062(2008-$6,425)duetolossesonhedginginstrumentsof$35,405(2008-$12,103),partiallybeingoffsetbygainsonhedgeditemsattributabletothehedgedriskof$30,343(2008-$5,678).Theselossesareincludedwithinoperatingincomeasnethedginglosses.

Duringtheyear,theGroupalsorecognisedgainsof$4,074(2008–lossesof$11,886)asaresultoffailedhedgeswhichareincludedwithinoperatingincomeaspartofnettradinglossesasthesederivativesareclassifiedastradingderivativesuponfailure.


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11. Financial assets at fair value through profit or loss 2009 2008 $ $Trading securities Governmentbonds — 4,869Corporatebonds — 65,859Asset-backedsecurities — 464,203 — 534,931Add:Interestreceivable — 1,286 — 536,217

Theaverageeffectiveyieldonthesesecuritiesduringtheyearwas4.6%(2008–4.1%).

12. Other assets 2009 2008 $ $ Prepaymentsanddeferreditems 7,759 6,566Other accounts receivable 37,777 53,368 45,536 59,934

13. Investment securities 2009 2008 $ $Available-for-sale Equitysecurities-unquoted 550 571Governmentdebtsecurities 904,965 817,204Otherdebtsecurities 821,251 1,147,904 1,726,766 1,965,679 Add:Interestreceivable 16,924 38,590 1,743,690 2,004,269

Theaverageeffectiveyieldduringtheyearondebtsecuritiesandtreasurybillswas5.5%(2008–5.2%).TheGrouphasaregulatoryreserverequirementtomaintainapercentageofdepositliabilitiesincashorintheformofGovernmentsecurities.AtOctober31,2009thereserverequirementamountedto$617,585(2008-$393,794)ofwhich$252,140(2008-$232,824)isincludedwithincashandbalanceswithCentralBanks(note8).

Available-for-salesecurities intheamountof$14,844(2008-$15,037)werepledgedassecurity for investmentnotecertificatesissuedbytheGroup(note20).

The movement in investment securities (excluding interest receivable) is summarised as follows:

2009 2008 $ $ Balance,beginningofyear 1,965,679 2,432,953 Additions(purchases,changesinfairvalueandforeignexchange) 943,081 1,119,532Disposals(salesandredemptions) (1,181,994) (1,586,806) Balance, end of year 1,726,766 1,965,679


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14. Loans and advances to customers

October 31, 2009 Personal Business & Mortgages Loans Government Total $ $ $ $ Performingloans 2,301,076 679,442 3,533,541 6,514,059Impairedloans 212,341 80,768 271,517 564,626 Grossloans 2,513,417 760,210 3,805,058 7,078,685 Less:provisionsforimpairment (30,587) (34,750) (96,131) (161,468) 2,482,830 725,460 3,708,927 6,917,217 Add:Interestreceivable 30,962Less:Unearnedfeeincome (42,703) 6,905,476

October 31, 2008 Personal Business & Mortgages Loans Government Total $ $ $ $ Performingloans 2,353,279 754,254 3,480,154 6,587,687Impairedloans 142,905 69,167 161,849 373,921 Grossloans 2,496,184 823,421 3,642,003 6,961,608 Less:provisionsforimpairment (28,911) (37,322) (67,756) (133,989) 2,467,273 786,099 3,574,247 6,827,619 Add:Interestreceivable 30,017Less:Unearnedfeeincome (43,358) 6,814,278

Movement in provisions for impairment for 2009 is as follows: Personal Business & Mortgages Loans Government 2009 $ $ $ $

Balance,beginningofyear 28,911 37,322 67,756 133,989Individualimpairment 3,404 8,842 29,968 42,214Collectiveimpairment 75 (1,162) 2,242 1,155Recoveries — 1,642 143 1,785Writeoffs (1,803) (11,894) (3,978) (17,675) Balance,endofyear 30,587 34,750 96,131 161,468


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14. Loans and advances to customers (continued)

Movement in provisions for impairment for 2008 is as follows: Personal Business & Mortgages Loans Government 2008 $ $ $ $

Balance,beginningofyear 25,819 29,595 51,309 106,723Individualimpairment 2,657 7,694 18,921 29,272Collectiveimpairment 405 1,145 1,193 2,743Recoveries 30 3,922 51 4,003Writeoffs — (5,034) (3,718) (8,752) Balance,endofyear 28,911 37,322 67,756 133,989 Ageing analysis of past due but not impaired loans for 2009 Personal Business & Mortgages Loans Government 2009 $ $ $ $

Lessthan30days 348,338 65,628 275,673 689,63931–60days 57,477 11,349 125,662 194,48861–90days 28,691 7,514 48,246 84,451 434,506 84,491 449,581 968,578 Ageing analysis of past due but not impaired loans for 2008 Personal Business & Mortgages Loans Government 2008 $ $ $ $

Lessthan30days 277,373 69,736 192,709 539,81831–60days 47,119 16,594 128,807 192,52061–90days 309 20 2,805 3,134 324,801 86,350 324,321 735,472

Theaverageinterestyieldduringtheyearonloansandadvanceswas7.4%(2008–8.4%).ImpairedloansasatOctober31,2009amountedto$564,626(2008-$373,921)andinteresttakento incomeonimpaired loansduringtheyearamountedto$5,453(2008-$3,671).

Loans and advances to customers include finance lease receivables: 2009 2008 $ $ Nolaterthan1year 12,254 21,004Laterthan1yearandnolaterthan5years 23,821 2,872Laterthan5years 57 13,233 Grossinvestmentinfinanceleases 36,132 37,109 Unearnedfuturefinanceincomeonfinanceleases (9,711) (9,703) Net investment in finance leases 26,421 27,406


46

15. Property and equipment Equipment, Land and furniture Leasehold buildings and vehicles improvements TotalOctober 31, 2009 $ $ $ $ Cost Balance,beginningofyear 96,646 171,675 25,181 293,502Purchases 1,437 12,152 1,168 14,757Disposals (1,923) (2,712) (574) (5,209) Balance, end of year 96,160 181,115 25,775 303,050 Accumulated depreciation Balance,beginningofyear 27,292 126,711 12,343 166,346Depreciation 2,771 14,082 1,660 18,513Disposals (626) (1,817) (354) (2,797) Balance, end of year 29,437 138,976 13,649 182,062 Net book value, end of year 66,723 42,139 12,126 120,988

Equipment, Land and furniture Leasehold buildings and vehicles improvements TotalOctober 31, 2008 $ $ $ $

Cost Balance,beginningofyear 97,801 161,250 19,917 278,968Purchases 44 12,106 5,354 17,504Disposals (1,199) (1,681) (90) (2,970) Balance, end of year 96,646 171,675 25,181 293,502 Accumulated depreciation Balance,beginningofyear 24,737 107,311 10,918 142,966Depreciation 3,034 20,423 1,490 24,947Disposals (479) (1,023) (65) (1,567) Balance, end of year 27,292 126,711 12,343 166,346 Net book value, end of year 69,354 44,964 12,838 127,156

Includedaspartofequipment,furnitureandvehicles isanamountfor$12,103(2008–$13,527)relatingtosystemsdevelopmentcostsandworkinprogresswhichisincompleteandnotyetinoperationandonwhichnodepreciationhasbeencharged.


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16. Deferred income taxes

Themovementonthedeferredincometaxaccountwasasfollows:

2009 2008 $ $ Deferredtaxposition,beginningofyear 14,248 4,670Deferredtax(charge)/credittostatementofincomefortheyear (1,845) 4,508Deferredtax(charge)/credittoequityfortheyear (3,301) 5,070 Netdeferredtaxposition,endofyear 9,102 14,248

2009 2008 $ $Represented by: Deferredtaxassets 12,987 15,768Deferredtaxliabilities (3,885) (1,520) Netdeferredtaxposition,endofyear 9,102 14,248

2009 2008 $ $ The components of the net deferred tax position are: Acceleratedtaxdepreciation 1,016 1,783Loanlossprovisions 795 1,032Other provisions 3,331 5,492Taxlossescarriedforward 8,614 7,046Pensionandotherpostretirementbenefitassets (6,423) (6,175)Changesinfairvalueofavailable-for-saleinvestmentsecuritiesinequity 1,769 5,070 9,102 14,248

Thedeferredtaxincludestaxlossesof$34,456(2008-$28,185),whichwillexpirebetween2011and2018.

TheGrouphastaxlossesof$434,400(2008-$366,042)forwhichnodeferredtaxassetshavebeenrecognisedduetouncertaintyoftheirrecoverability.Theselosseswillexpirebetween2010and2018.


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17. Retirement benefit assets and obligations

TheGrouphasinsuredgrouphealthplansandanumberofpensionschemes.Thepensionschemesareamixtureofdefinedbenefitanddefinedcontributionplans. Mostof thedefinedbenefitpensionplansarenon-contributoryandallowforadditionalvoluntarycontributions. The insuredhealthplansallowfor retirees tocontinuetoreceivehealthbenefitsduringretirement.Theplansarevaluedbyindependentactuarieseverythreeyearsusingtheprojectedunitcreditmethod.

Thetotalexpensechargedfortheyearwas$4,383(2008-$3,915)representscontributionstodefinedcontributionplansbytheGroupatratesspecifiedintherulesoftheplan.RefertoNote5.

The amounts recognised on the balance sheet were determined as follows:

Defined benefit Post retirement pension plans medical benefits 2009 2008 2009 2008 $ $ $ $ Fairvalueofplanassets 234,036 228,285 — —Presentvalueofobligations (212,865) (194,733) (7,313) (6,882) 21,171 33,552 (7,313) (6,882)Unrecognisedactuarialgains/(losses) 26,971 12,749 (742) (1,065)Limitoneconomicvalueofsurplus (2,672) (1,496) — — Net asset/(obligation) 45,470 44,805 (8,055) (7,947)

ThepensionplanassetsincludetheBank’scommonshareswithafairvalueof$1,711(2008-$2,359).

Changes in the fair value of the defined benefit pension plan assets were as follows:

2009 2008 $ $ Openingfairvalueofplanassets 228,285 269,205Expectedreturn 18,011 20,112Contributionsbyemployer 8,852 24Benefitspaid (3,479) (6,876)Foreignexchangetranslationlosses (4,173) (3,293)Actuarial losses (13,460) (50,887) Closingfairvalueofplanassets 234,036 228,285

Changes in the present value of the obligations for defined benefit pension plans were as follows:

2009 2008 $ $ Openingobligations 194,733 178,533Interestcost 14,862 13,236Current service cost 7,901 8,198Benefitspaid (3,479) (6,876)Foreignexchangetranslationgains (2,087) (1,457)Actuariallossesonobligations 935 3,099 Closingobligations 212,865 194,733


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17. Retirement benefit assets and obligations (continued)

Changes in the present value of the obligations for post retirement medical benefits were as follows:

2009 2008 $ $ Openingobligations 6,882 5,135Interestcost 470 340Current service cost 163 149Benefitspaid (181) (160)Foreignexchangetranslationgains (21) (17)Actuariallossesonobligations — 1,435 Closingobligations 7,313 6,882 TheBankexpectstocontribute$6,266(2008-$9,640)toitsdefinedbenefitpensionplaninthefollowingyear.

The amounts recognised in the statement of income were as follows:

Defined benefit Post retirement pension plans medical benefits 2009 2008 2009 2008 $ $ $ $ Current service cost 7,901 8,198 163 149Interestcost 14,862 13,236 470 340Expectedreturnonplanassets (18,011) (20,112) — —Netactuarialloss/(gain)recognisedduringtheyear 394 (908) (268) (559)Limitoneconomicvalueofsurplus 1,176 1,496 — — Totalamountincludedinstaffcosts(note5) 6,322 1,910 365 (70) Actualreturn/(loss)onplanassets 4,551 (30,775) — —

The movements in the net asset/(obligation) recognised on the balance sheet were as follows:

Defined benefit Post retirement pension plans medical benefits 2009 2008 2009 2008 $ $ $ $ Balance,beginningofyear 44,805 47,307 (7,947) (8,391)Chargefortheyear (6,322) (1,910) (365) 70Contributionsbyemployer 8,852 24 — —Benefitspaid — — 181 160Foreignexchangetranslation(losses)/gains (1,865) (616) 76 214 Balance,endofyear 45,470 44,805 (8,055) (7,947)


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17. Retirement benefit assets and obligations (continued)

The major categories of plan assets as a percentage of the fair value of total plan assets were as follows:

Main Bahamas Jamaica Plan Plan Plan % % % 2009 2008 2009 2008 2009 2008

Equityinstruments 52 59 51 60 12 20Debtinstruments 46 41 46 39 42 37Property — — — — 28 28Otherassets 2 — 3 1 18 15 The principal actuarial assumptions used at the balance sheet date were as follows:

Defined benefit pension plans 2009 2008

Discountrate 6.0–18.0% 6.0–13.0%Expectedreturnonplanassets 7.0–13.5% 7.0–12.5%Futuresalaryincreases 4.5–16.0% 4.5–11.0%Futurepensionincreases 0.0–12.0%0.0–4.0%

Post retirement medical benefits 2009 2008

Discountrate 6.0–18.0% 6.0–13.0%Premiumescalationrate 4.5–5.0% 4.5–10.0%Existingretireeage 60–65 60–65

Anincreaseof1%intheassumedmedicalcosttrendrateforeachfutureyearwouldhaveresultedinahigherdefinedbenefitobligationof$8,410atOctober31,2009(2008-$7,960)andahigherchargefortheyearof$730(2008-$570).Adecreaseof1% in themedicalcost trend rate foreach futureyearwouldhave resulted ina lowerdefinedbenefitobligationof$6,400atOctober31,2009(2008-$6,010)andalowerchargefortheyearof$550(2008-$420).

Defined benefit pension plan amounts for the current and previous four years were as follows:

2009 2008 2007 2006 2005 $ $ $ $ $ Fairvalueoftheplanassets 234,036 228,285 269,205 244,545 230,550Presentvalueofobligations (212,865) (194,733) (178,533) (166,505) (148,730) 21,171 33,552 90,672 78,040 81,820

a) FirstCaribbean International Bank Limited Retirement Plan ThelastactuarialvaluationwasconductedasatNovember1,2007andrevealedafundsurplusof$35,800.

b) FirstCaribbean International Bank (Bahamas) Limited Retirement Plan ThelastactuarialvaluationwasconductedasatNovember1,2007andrevealedafundsurplusof$31,700.

c) FirstCaribbean International Bank (Jamaica) Limited Retirement Plan ThelastactuarialvaluationwasconductedasatOctober31,2006andrevealedafundsurplusof$12,928.


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18. Intangible assets Customer related Total Total Goodwill intangible 2009 2008 $ $ $ $Cost Balance, beginning and end of year 334,907 17,748 352,655 352,655 Accumulated amortisation Balance,beginningofyear — 8,142 8,142 5,179Amortisation — 2,963 2,963 2,963

Balance, end of year — 11,105 11,105 8,142 Net book value, end of year 334,907 6,643 341,550 344,513

i) Goodwill

Impairment tests for goodwill

GoodwillisallocatedtotheGroup’scash-generatingunits(CGUs)identifiedaccordingtocountryofoperation.Thisallocationispresentedbelow.

2009 2008 $ $ St.Vincent 946 946Barbados(OffshoreOperations) 17,040 17,040Bahamas 177,920 177,920Cayman 105,369 105,369Trinidad 4,260 4,260Curacao 29,372 29,372 334,907 334,907

Therecoverableamountforeachgroupofcash-generatingunitshasbeendeterminedusingvalue-in-usecalculations.Thesecalculationsusecashflowprojectionsbasedonfinancialbudgetsapprovedbymanagementcoveringathreeyearperiod.Cashflowsbeyondthethreeyearperiodareextrapolatedusingtheestimatedgrowthratesstatedbelow.Thegrowthratedoesnotexceedthelong-termaveragegrowthrateforthecountryinwhichtheCGUoperates.

Key assumptions used for value-in-use calculations

Adescriptionofeachassumptiononwhichmanagementhasbaseditscashflowprojectionsfortheperiodcoveredbythemostrecentbudgets/forecasts isnotedbelow.KeyassumptionsarethosetowhichtheCGUsrecoverableamountismostsensitive.

Discount Rate Growth Rate 2009 2008 2009 2008 % % % % St.Vincent 12 12 2 3Barbados(OffshoreOperations) 9 12 4 7Bahamas 11 13 3 4Cayman 10 13 2 5Trinidad 14 14 5 10Curacao 12 12 2 5


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18. Intangible assets (continued)

ii) Customer-related intangible assets

Customer-related intangible assets represent the fair value of each customer relationship acquired in a businesscombination,asoftheacquisitiondate,whichmetthecontractual-legalcriterionforidentificationasanintangibleassetinthebalancesheetseparatedfromgoodwill.Thefairvalueofthecustomerrelationshipsisamortisedonastraightlinebasisoveritsexpectedusefullifeofsixyears.

19. Customer deposits

Payable on Payable Payable at a 2009 2008 demand after notice fixed date Total Total $ $ $ $ $ Individuals 417,469 1,672,719 1,523,046 3,613,234 3,741,001BusinessandGovernments 1,926,243 639,560 2,309,707 4,875,510 5,253,981Banks 55,521 — 85,622 141,143 171,043 2,399,233 2,312,279 3,918,375 8,629,887 9,166,025 Add:Interestpayable 1,595 827 26,044 28,466 30,024 2,400,828 2,313,106 3,944,419 8,658,353 9,196,049

Theaverageeffectiverateofinterestondepositsduringtheyearwas1.8%(2008–2.5%).

20. Other borrowed funds 2009 2008 $ $ Investmentnotecertificatesandotherfundraisinginstruments 36,649 21,813 Add:Interestpayable 1,840 1,922 38,489 23,735

Theaverageeffectiverateofinterestonotherborrowedfundsduringtheyearwas6.2%(2008–4.0%).

InvestmentnotecertificatesissuedbytheGroupamountingto$14,844(2008-$15,037)aresecuredbydebtsecuritiesreferredtoinnote13.

21. Other liabilities 2009 2008 $ $ Accountspayableandaccruals 54,185 65,971Amountduetorelatedparties 63 994 54,248 66,965

TheamountduetorelatedpartiesisduetoCIBCentitiesandisinterest-freewithnofixedtermsofrepayment.


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22. Debt securities in issue 2009 2008 $ $ USD$200millionguaranteedsubordinatedfloatingratenotesdue2015 93,427 199,420JMD$1,500millionunsubordinatedfloatingratenotesdue2012 — 6,600TT$195millionsubordinatedfixedratenotesdue2017 30,794 31,240 124,221 237,260Add:Interestpayable 401 1,272 124,622 238,532

In2005,theGroupissuedfloating-ratenoteswithafacevalueof$200,000throughitsCaymansubsidiary.ThenotesaredenominatedinUnitedStatesdollars.Theinterestrateonthenotesisresetevery3monthsattheUSD3monthLIBORinterestrateplus70basispointsduringthefirst5years.ThenotesarepayableattheoptionoftheBankin2010andareguaranteedonasubordinatedbasisbytheParentandtwofellowsubsidiarycompanies.ThenotesarelistedontheLuxembourgExchange.Duringtheyear,theBankrepaid$105,993ofthisdebt.Theaverageeffectiveinterestrateduring2009was2.7%(2008–4.8%).

InApril2007,theGroupissuedunsubordinatedtermredeemablefloatingratenoteswithafacevalueofJMD$1,500,000(USD$23,000)throughitsJamaicasubsidiarydueApril2012.Duringtheyear,thesenoteswerefullyrepaid.TheinterestonthenoteswaspayableatarateoftheweightedaverageGovernmentGrowthTreasuryplus1.65%perannum.Theaverageeffectiveinterestrateduring2009was20.0%(2008–14.9%).

InMarch2007,theGroupissuedsubordinatedtermnoteswithafacevalueofTT$195,000(USD$31,000)throughitsTrinidadsubsidiarydueinMarch2017.Theinterestonthenoteswillbefixedforthefirsttwoyearsat7.90%;thenfixedforthenextthreeyearsat8.15%;thereafterfixedat8.75%fortheremainingterm.Theaverageeffectiveinterestrateduring2009was8.1%(2008–7.9%).

23. Issued capital 2009 2008 $ $ Balance,beginningandendofyear 1,117,349 1,117,349

TheBank isentitled to issueanunlimitednumberof commonshareswithnoparvalue. Commonshareholdersareentitledtoattendandvoteatallmeetingsofshareholders.Commonshareholdershaveonevoteforeachshareowned.

TheBankhad1,525,176,762sharesissuedandoutstandingatthebeginningandendoftheyear.

Capital

Objectives,policiesandprocedures CapitalstrengthprovidesprotectionfordepositorsandcreditorsandallowstheGrouptoundertakeprofitablebusiness

opportunitiesastheyarise.Ourobjectiveistoemployastrongandefficientcapitalbase.Wemanagecapitalinaccordancewithpoliciesestablishedby theBoard. Thesepolicies relate tocapital strength,capitalmix,dividendsand returnofcapital,andtheunconsolidatedcapitaladequacyofregulatedentities.Eachpolicyhasassociatedguidelines,andcapitalismonitoredcontinuouslyforcompliance.

Eachyearacapitalplanandthree-yearoutlookareestablished,whichencompassalltheassociatedelementsofcapital:forecastsof sourcesanduses,maturities, redemptions,new issuance,corporate initiatives,andbusinessgrowth. Thecapitalplanisstress-testedinvariouswaystoensurethatitissufficientlyrobustunderallreasonablescenarios.Alloftheelementsofcapitalaremonitoredthroughouttheyear,andthecapitalplanisadjustedasappropriate.

Therewerenosignificantchangesmadeintheobjectives,policiesandproceduresduringtheyear.


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23. Issued capital (continued)

Capital (continued)

Regulatoryrequirements Ourregulatorycapitalrequirementsaredeterminedinaccordancewithguidelinesissuedbyourbankingregulatorsacross

theregionandinthecaseofBarbados,bytheCentralBankofBarbados.Theseguidelinesevolvefromtheframeworkofrisk-basedcapitalstandardsdevelopedbytheBaselCommittee,BankofInternationalSettlement(BIS).

BISstandardsrequirethatbanksmaintainminimumTierIandTierI&TierIIratiosof4%and8%respectively.TheCentralBankofBarbadoshasestablishedthatFirstCaribbeanInternationalBankLimitedmaintainsaminimumcombinedratioof14%.Duringtheyear,wehavecompliedinfullwithallofourregulatorycapitalrequirements.

Regulatorycapital RegulatorycapitalconsistsofTierIandTierIIcapital,lesscertaindeductions.TierICapitalcomprisescommonstock,

retainedearnings,andminorityequityinterestinconsolidatedsubsidiaries,lessgoodwillandotherdeductions.TierIICapitalprincipallycompriseshybridcapitalinstrumentssuchassubordinateddebtandgeneralprovisionsand45%ofrevaluationreservesonavailable-for-salesecurities.

AsatOctober31,2009,TierIandTierI&TierIICapitalratioswere19%and22%respectively(2008–17%and20%respectively).

24. Treasury shares 2009 2008 $ $ Balance,beginningofyear (500) (1,418)Netdisposaloftreasuryshares 500 918 Balance, end of year — (500)

AsatOctober31,2009,theBankheldnotreasuryshares(October31,2008–267,587treasuryshares).

WheretheBankorothermembersoftheconsolidatedGrouppurchasetheBank’sequitysharecapital,theconsiderationpaidisdeductedfromtotalequityattributabletoequityholdersoftheparentastreasurysharesuntiltheyarecancelled.Wheresuchsharesaresubsequentlysoldorreissued,anyconsiderationreceivedisincludedintotalequityattributabletoequityholdersoftheparent.


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25. Reserves 2009 2008 $ $ Statutoryandgeneralbankingreserves 222,493 194,895Revaluationreserve–available-for-saleinvestmentsecurities 11,820 (99,753)Translation reserve (20,572) (7,255)Share-basedpaymentreserve — 625Contributedsurplusreserve 3,119 3,119Reverseacquisitionreserve (463,628) (463,628) Total reserves (246,768) (371,997)

The movements in reserves were as follows: 2009 2008 $ $Statutory and general banking reserve Balance,beginningofyear 194,895 165,322Transfersfromretainedearnings 27,598 29,573 Balance,endofyear 222,493 194,895

Statutory reserves representsaccumulated transfers fromnet income inaccordancewith local legislationandgeneralbankingreservesrepresentstransfersfromretainedearningstomeetqualifyingcapitalrequirementsunderlocallegislationwhicharenotdistributable.

2009 2008 $ $Revaluation reserve – available-for-sale investment securities Balance,beginningofyear (99,753) 790Netgains/(losses)fromchangesinfairvalueofavailable-for-sale investment securities 111,573 (100,543) Balance,endofyear 11,820 (99,753)

Unrealisedgainsandlossesarisingfromchangesinthefairvalueofsecuritiesclassifiedasavailable-for-salearerecognisedinequitythroughtherevaluationreserve.

2009 2008 $ $Translation reserve Balance,beginningofyear (7,255) (7,738)Foreigncurrencytranslationdifferencearisingduringtheyear (13,317) 483 Balance,endofyear (20,572) (7,255) Onconsolidation,exchangedifferencesarisingfromthetranslationofthenetinvestmentinforeignoperationsandofborrowingsandother currency instrumentsdesignatedashedgesof such investments, are recorded in shareholders’equitythroughthetranslationreserve.


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25. Reserves (continued) 2009 2008 $ $Share-based payment reserve Balance,beginningofyear 625 1,887Sharesissuedduringtheyear (625) (1,262) Balance,endofyear — 625

Previously,theGroupengagedinequitysettledshare-basedpaymenttransactionsinrespectofservicesrenderedfromcertainofitsemployees.Thecostoftheservicesreceivedwasmeasuredbyreferencetothefairvalueofthesharesorshareoptionsgranted.Thecostrelatedtothesharesorshareoptionsgrantedwasrecognisedinthestatementofincomeovertheperiodthattheservicesoftheemployeesarereceived,whichisthevestingperiod,withacorrespondingcredittoequitythroughthisreserveaccount.TheGrouphaschangedtocashbasedpaymenttransactionsandassuch,theremainingsharebasedtransactionswerecompletedduring2009(refertonote27).

2009 2008 $ $Contributed surplus reserve Balance,beginningandendofyear 3,119 3,119

ThisreserverepresentsthesettlementofcertainobligationsonbehalfoftheBankbytheparent.

2009 2008 $ $Reverse acquisition reserve Balance,beginningandendofyear (463,628) (463,628)

UnderthecombinationonOctober11,2002,CIBCWestIndiesbecamethelegalparentcompanywithBarclaystransferringitsoperationstosubsidiariesofCIBCWestIndiesinexchange,ultimately,forcommonsharesandnewlycreatedclassesofnon-votingandpreferencesharesofCIBCWestIndies.BarclayswasidentifiedastheacquirerasthefairvalueofitsbusinesspriortothecombinationwassignificantlygreaterthanthefairvalueofCIBCWestIndies’businessandasaresultBarclayshadthegreatereconomicinterest.ThissituationisdescribedbyIFRSasareverseacquisition.

InaccordancewithIFRS,theequityoftheBankatOctober11,2002(thedateofthecombination)comprisedtheequityofBarclays($135,290)togetherwiththefairvalueoftheconsiderationgiventoacquireCIBCWestIndies($848,149).However,legallythesharecapitalandstatutoryreservesoftheBankcomprisetheissuedsharecapitalandstatutoryreservesofCIBCWestIndiesplusthesharesissuedtoeffectthecombination,recordedatfairvalue.ThereverseacquisitionreserveisthereforethedifferencebetweenthelegallyrequiredsharecapitalandstatutoryreservestogetherwiththeretainedearningsofBarclays,andtheequityoftheBankpresentedinaccordancewithIFRS.

26. Dividends

AsatOctober31,2009,theDirectorsrecommendedforapprovalafinalcommonsharedividend,whichisnotreflectedinthesefinancialstatements,ofthreecents($0.0300)percommonshare(2008-$0.0300),bringingthetotaldividendpayoutfor2009tosixcents($0.0600)percommonshare(2008-$0.0600).


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27. Other employee benefits

Stock option plan

Oneofthepredecessororganisations,CIBCWestIndies,hadastockoptionplan.Undertherulesoftheplan,optionstopurchasecommonsharesintheBankweregrantedtoemployeesthatentitledtheemployeetopurchasecommonsharesoftheBankatthemarketprice(strikeprice)ofthesharesonthedateofgrantingtheoptions.Theoptionsvestoverafour-yearperiodandthemaximumperiodwithinwhichanoptionmaybeexercisedistenyears.InFebruary1999,1,775,000optionsweregrantedtocurrentemployeesatastrikepriceofonedollarandseventy-twocents($1.72)pershare.

Todatenofurtheroptionshavebeengranted.During2009,nooptionswereexercised(2008–550,000)andnooptionswereforfeited.ThenumberofoptionsoutstandingasatOctober31,2009amountedto500,000(2008–500,000).

TherearenoexpensesarisingfromthisplanasthevestingperiodhaspassedandliabilitiesatOctober31,2009amounted

to$nil(2008-$57).

Long term incentive plan

TheGroupoperatesalongtermincentiveplanwherebyundertherulesoftheplan,awardsaregrantedtoemployeesonadiscretionarybasisandvestovervaryingperiods.PriortoOctober31,2008,theseawardswereshare-basedawardswherebycommonsharesof theBankweregrantedtoemployeesonadiscretionarybasisandthesharesvestedovervaryingperiods.EffectivefromNovember1,2008,theplanwaschangedtoacashbasedawardwherebycashisgrantedtoemployeesonadiscretionarybasisandvestovervaryingperiods.

Thecashawardgrantedin2009amountedto$1,530(2008–$2,610).Theamountsexpensedduringtheyearrelatedtothesecashawardswere$1,877(2008-$1,772).Allsharesunderthepreviousplanhavevested.

Employee share purchase plan

UnderourEmployeeSharePurchasePlan,qualifyingemployeescanchooseeachyeartohaveupto10%oftheireligibleearningswithheld to purchase common shares in the Bank. The Bankmatches 50% of the employee contributionamount,up toamaximumcontributionof6%ofeligibleearnings,dependingupon lengthof serviceand job level.TheBankcontributionsvestafteremployeeshavetwoyearsofcontinuousparticipationintheplan,andallsubsequentcontributionsvestimmediately.

Allcontributionsarepaidintoatrustandusedbytheplantrusteestopurchasecommonsharesintheopenmarket.TheBankcontributionsareexpensedasincurredandtotalled$1,096in2009(2008-$634).


58

28. Related party transactions and balances TheGroup’smajorshareholderisCIBC.

Anumberofbankingtransactionsareenteredintowithrelatedpartiesinthenormalcourseofbusiness.ThekeyrelatedpartybalancesandtransactionsincludedintheGroup’sfinancialsaredisclosedbelow.

Directors and key management Major personnel shareholder 2009 2008 2009 2008 $ $ $ $Asset balances: Cashandduefrombanks — — 425,735 19,647Loansandadvancestocustomers 5,820 4,638 — —Derivativefinancialinstruments — — 1,547 285 Liability balances: Customerdeposits 21,235 8,055 590 8,414Derivativefinancialinstruments — — 65,684 39,660 Revenue transactions: Interestincomeearned 328 147 506 9,445Other revenue 5 — — — Expense transactions: Interestexpenseincurred 177 221 1,673 199Otherexpensesforbankingandsupportservices — — 888 652

2009 2008 $ $Key management compensation Salariesandothershort-termbenefits 8,030 7,658Post-employmentbenefits 473 421Longtermincentivebenefits 304 1,388 8,807 9,467

Non-Executive Directors’ remuneration

A listingof themembers of theBoardofDirectors is includedwithin theGroup’sAnnual Report. In 2009, the totalremunerationforthenon-executivedirectorswas$207(2008-$108).TheExecutiveDirectorsremunerationisincludedunderkeymanagementcompensation.


59

29. Commitments, guarantees and contingent liabilities

Thebankconductsbusinessinvolvinglettersofcredit,guarantees,performancebondsandindemnities,whicharenotreflectedinthebalancesheet. 2009 2008 $ $ Lettersofcredit 98,861 95,878Loancommitments 737,471 813,123Guaranteesandindemnities 175,272 160,297 1,011,604 1,069,298

TheGroupisthesubjectoflegalactionsarisinginthenormalcourseofbusiness.Managementconsidersthattheliability,ifany,oftheseactionswouldnotbematerialbeyondwhatisalreadyprovidedforinthesefinancialstatements.

30. Future rental commitments under operating leases

AsatOctober31theGroupheldleasesonbuildingsforextendedperiods.Thefuturerentalcommitmentsundertheseleaseswereasfollows: 2009 2008 $ $ Notlaterthan1year 6,733 7,142Laterthan1yearandlessthan5years 9,527 15,210Laterthan5years 372 1,942 16,632 24,294

31. Fiduciary activities

TheGroupprovidescustodyandtrusteediscretionaryinvestmentmanagementservicestothirdparties.Thoseassetsthatareheldinafiduciarycapacityarenotincludedinthesefinancialstatements.Atthebalancesheetdate,theGrouphadinvestmentassetsunderadministrationonbehalfofthirdpartiesamountingto$3,097,246(2008-$2,218,723).

32. Business segments

EffectiveNovember1,2008,theGroupre-organiseditslinesofbusinessbystreamliningfromfivetotwolinesofbusinesstoestablishamorecustomer-centricorganisationwithgreateremphasisoncollaborationand sharingofknowledge,improvedproductivityandinnovation.

ThepreviousfivemainlinesofbusinesswereRetailBanking;CreditCardBanking;CorporateBanking;WealthManagement;andCapitalMarkets.ThetwonewlinesofbusinessarecalledRetail&WealthManagement(R&WM)andCorporateInvestmentBanking(CIB)andaresupportedbytwoseparatelyreportablefunctionaloperatingunits,namelyTreasuryandOther.

TheWealthManagementlineofbusinesswassegregatedandmergedasfollows: • PersonalWealthandInternationalMortgagebusinessweremergedaspartofR&WM;and • CorporateInternationalWealthbusinesswasmergedaspartofCorporateBankingwithinCIB.

TheCreditCardBankinglineofbusinesswassegregatedandmergedasfollows: • IssuingbusinesswasmergedaspartofR&WM;and • AcquiringbusinesswasmergedaspartofCorporateBankingunderCIB.

TheCapitalMarketslineofbusiness,alongwiththeCorporateFinanceunitofthepreviousCorporateBankinglineofbusinessweremergedtoformtheInvestmentBankingunitofCIBtobetterleverageourresourcestomeetclients’needs.


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32. Business segments (continued)

Retail and Wealth Management (R&WM)

Thislineofbusinessprovidesafullrangeoffinancialproductsandservicestoindividuals.Clientscanaccessourservicesandproducts throughournetworkofbranches in theCaribbean, aswell as, use the convenienceofABMs, InternetBanking,TelephoneBankingandCards(Issuing).OurWealthManagementcentreshelpindividualsachievetheirfinancialgoalsthroughanarrayofinvestmentproducts,depositaccounts,loans,mortgagesandotherservices.

ForPersonalWealthManagementclientsandDomesticclientswhomeettheWealthManagementcriteria,theBankofferstraditionalday-to-daybankingservices;investmentadvice;andarelationshipmanagementofferingofbeingpro-activeonclientneeds.TheInternationalMortgagegroupprovidesfundinginU.S.dollars,andother‘hardcurrencies’typicallytonon-residentsoftheCaribbeanseekingtopurchasehomesintheCaribbeanforpersonal/investmentuse.

Corporate Investment Banking (CIB)

Thislineofbusinesscomprisestwosub-segments:CorporateBankingandInvestmentBanking.

Corporate banking provides a full range of corporate and commercial banking services, including Cards MerchantAcquiringbusiness,tolargeandmid-sizecorporateandsmallbusinesses,governments,financialinstitutions,internationaltrading companies and privatewealth vehicles throughout theCaribbean. TheCorporate InternationalWealth unitspecialises inprovidingbanking services tobusinesses andprofessional intermediarieswhouse international financialcentres.

Investment Banking provides debt and equity capitalmarkets and corporate finance products and services to largecorporations,financialinstitutionsandgovernments.

Treasury (TST)

Treasurymanagestheinterestrate,foreignexchangeandliquidityriskoftheGroup.Inaddition,TSTconductsforeignexchangetransactionsonbehalfofBankclientsandhedgesfixedrateloansandinvestmentswithinterestrateswaps.

Other

Othercomprisesallfunctionalgroups,excludingTST,thatsupporttheBank’slinesofbusiness.Thesefunctionalgroupshold incomestatementandbalancesheet itemsthatarenotdirectlyattributabletothe linesofbusinessand includeeliminations.Therevenuesandexpensesofthefunctionalgroupsaregenerallyallocatedtothelinesofbusiness.

Transactionsbetweenthebusinesssegmentsareonnormalcommercialtermsandconditions.

Fundsareordinarilyallocatedbetweensegments,resultinginfundingcoststransfers.InterestchargedforthesefundsisbasedontheGroup’sfundstransferpricing.

Segment assets and liabilities comprise operating assets and liabilities, being themajority of the balance sheet, butexcludeitemssuchastaxationandintangibleassets.

Internalchargesandtransferpricingadjustmentsarereflectedintheperformanceofeachbusiness.

EffectiveNovember1,2008,theGroupchangeditstransferpricingmethodology.Thecomparativeyearhoweverwasnotrestatedtoreflectthesechanges,asitwasdeemedimpracticabletodeterminethecumulativeeffectatthebeginningof the currentperiod,of applying thenewmethodology to thepriorperiod. Consequently, the impactof thenewmethodologywillbereflectedprospectively.


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32. Business segments (continued)

R & WM CIB TST Other Group $ $ $ $ $October 31, 2009 Externalrevenues 272,146 347,529 149,285 (19,411) 749,549Revenuesfromothersegments 1,737 (22,562) 49,180 (28,355) — Total revenues 273,883 324,967 198,465 (47,766) 749,549 Segment result (10,896) 132,890 94,032 (13,844) 202,182Taxation 26,981 Net income for the year 175,201 Segmentassets 3,189,210 4,362,005 4,811,429 (2,223,693) 10,138,951Unallocatedassets 363,626 Total assets 10,502,577 Segmentliabilities 3,977,156 4,148,105 3,140,828 (2,295,238) 8,970,851Unallocatedliabilities 12,957 Total liabilities 8,983,808

R & WM CIB TST Other Group $ $ $ $ $

October 31, 2008 (restated) Externalrevenues 346,337 400,937 61,468 6,485 815,227Revenuesfromothersegments 77,903 8,447 32,175 (118,525) — Total revenues 424,240 409,384 93,643 (112,040) 815,227 Segment result 63,397 191,885 (17,365) (35,944) 201,973Taxation 22,220 Net income for the year 179,753 Segmentassets 3,492,843 4,378,379 5,428,921 (2,726,454) 10,573,689Unallocatedassets 366,465 Total assets 10,940,154 Segmentliabilities 4,887,987 4,364,525 3,031,215 (2,694,919) 9,588,808Unallocatedliabilities 15,551 Total liabilities 9,604,359

Geographicalsegmentsaresetoutinnote33(c).


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33. Financial risk management

A. Introduction

Risk is inherent intheBank’sactivitiesbut ismanagedthroughaprocessofongoingidentification,measurementandmonitoring,subjecttorisk limitsandothercontrols.ThisprocessofriskmanagementiscriticaltotheBank’scontinuingprofitabilityandeachindividualwithintheBankisaccountablefortheriskexposuresrelatingtohisorherresponsibilities.TheBankisexposedtocreditrisk,liquidityriskandmarketrisk,thelatterbeingsubdividedintotradingandnon-tradingrisks.Itisalsosubjecttovariousoperatingrisks.

By itsnature theGroup’sactivitiesareprincipally related to theuseoffinancial instruments. TheGroupacceptsdepositsfromcustomersatbothfixedandfloatingratesandforvariousperiodsandseekstoearnaninterestmarginbyinvestingthesefundsinhighqualityassets.TheGroupseekstoincreasethesemarginsbyconsolidatingshort-termfundsandlendingforlongerperiodsathigherrateswhilstmaintainingsufficientliquiditytomeetallclaimsthatmightfalldue.

TheGroupalsoseekstoraiseitsinterestmarginsbyobtainingaboveaveragemargins,netofprovisions,throughlendingtocommercialandretailborrowerswitharangeofcreditstanding.TheGroupalsoentersintoguaranteesandothercommitmentssuchaslettersofcreditandperformanceandotherbonds.

B. Credit risk

Creditriskprimarilyarisesfromdirectlendingactivities,aswellas,trading,investmentandhedgingactivities.Creditriskisdefinedastheriskoffinanciallossduetoaborrowerorcounterpartyfailingtomeetitsobligationsinaccordancewithagreedterms.

Processandcontrol The Credit RiskManagement Department (CRMD) is responsible for the provision of the Group’s adjudication,

oversightandmanagementofcreditriskwithinitsportfolios.TheCreditExecutiveCommittee(CrExCo)ofCRMDhasresponsibilityformonitoringcreditmetrics,providingdirectiononcreditissuesandmakingrecommendationsoncreditpolicy.

CRMDisguidedbytheGroup’sDelegationofAuthoritypolicywhichisbasedonthelevelsofexposureandrisk.

CreditsabovethediscretiondelegatedtothefrontlinebusinessareapprovedbyCRMDandabovethislevelbyCreditCommitteeandtheRisk&ConductReviewCommitteeoftheBoard(R&CRC).TheR&CRCalsohastheresponsibilityforsettingpolicyandkeyrisklimitsincludingportfoliolimitswhicharereviewedannually.

Creditrisklimits Credit limits are established for all loans (mortgages, personal andbusiness&government) for the purposes of

diversification and managing concentration. These include limits for individual borrowers, groups of relatedborrowers,industrysectors,countryandgeographicregionsandproductsorportfolios.

Collateral TheGroupemploysarangeofpoliciesandpracticestomitigatecreditrisk.Themosttraditionaloftheseisthetaking

ofsecurityforfundsadvanced,whichiscommonpractice.TheGroupimplementsguidelinesontheacceptabilityofspecificclassesofcollateralorcreditriskmitigation.Theprincipalcollateraltypesforloansandadvancestocustomersare:

•Mortgagesoverresidentialproperties •Chargesoverbusinessassetssuchaspremises,inventoryandaccountsreceivable •Chargesoverfinancialinstrumentssuchasdebtsecuritiesandequities

TheGroup’screditriskmanagementpoliciesincluderequirementsrelatingtocollateralvaluationandmanagement,including verification requirements and legal certainty. Valuations are updated periodically depending upon thenatureof thecollateral.Managementmonitorsthemarketvalueofcollateralandrequestsadditionalcollateral inaccordancewiththeunderlyingagreementduringitsperiodicreviewofloanaccountsinarrears.PoliciesareinplacetomonitortheexistenceofundesirableconcentrationinthecollateralsupportingtheGroup’screditexposure.


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33. Financial risk management (continued)

B. Credit risk (continued)

Geographicdistribution Thefollowingtableprovidesageographicdistributionofgrossdrawnandundrawnloansandadvancestocustomers

whichthereforeexcludesprovisionsforimpairment,interestreceivableandunearnedfeeincome.

Gross Gross Maximum Maximum Exposure Exposure Drawn undrawn 2009 Drawn undrawn 2008

$ $ $ $ $ $

Barbados 910,790 174,088 1,084,878 898,521 169,126 1,067,647Bahamas 2,258,070 161,678 2,419,748 2,300,990 174,353 2,475,343Cayman 1,332,393 103,260 1,435,653 1,417,776 117,693 1,535,469EasternCaribbean 906,215 96,772 1,002,987 907,732 115,311 1,023,043Jamaica 401,803 55,105 456,908 469,374 49,516 518,890BVI 161,612 17,587 179,199 170,804 18,338 189,142Belize 85,393 13,687 99,080 91,932 15,223 107,155Curacao 97,074 9,325 106,399 59,869 11,837 71,706Other 925,335 105,969 1,031,304 644,610 141,726 786,336 7,078,685 737,471 7,816,156 6,961,608 813,123 7,774,731

ExposuresbyIndustryGroupsThe following table provides an industry-wide break downof gross drawn and undrawn loans and advances tocustomerswhichthereforeexcludesprovisionsforimpairment,interestreceivableandunearnedfeeincome.

Gross Gross Maximum Maximum Exposure Exposure Drawn undrawn 2009 Drawn undrawn 2008 $ $ $ $ $ $ Agriculture 60,069 4,680 64,749 55,801 6,362 62,163Governments 669,427 25,960 695,387 638,453 42,756 681,209Construction 822,509 47,154 869,663 857,953 94,063 952,016Distribution 450,126 113,540 563,666 488,445 105,671 594,116Education 10,741 — 10,741 90 — 90Electricity,gas&water 65,348 6,059 71,407 89,230 5,091 94,321Fishing 70,368 4,938 75,306 73,746 6,343 80,089Health&socialwork 17,672 14,426 32,098 618 — 618Hotels&restaurants 609,712 18,721 628,433 577,772 18,512 596,284Individuals&individualtrusts 2,091,275 312,352 2,403,627 2,088,714 285,019 2,373,733Manufacturing 148,417 38,590 187,007 184,677 45,179 229,856Mining&quarrying 27,809 2,103 29,912 31,275 803 32,078Miscellaneous 1,061,187 64,426 1,125,613 950,115 96,851 1,046,966Otherfinancialcorporations 58,137 48,914 107,051 50,940 30,715 81,655Realestate,renting&otherbusinessactivities 772,301 24,341 796,642 722,035 66,100 788,135Transport,storage&communication 143,587 11,267 154,854 151,744 9,658 161,402 7,078,685 737,471 7,816,156 6,961,608 813,123 7,774,731


64



Impairedfinancialassetsandprovisionforcreditlosses TheGrouptakesonexposuretocreditrisk,whichistheriskthatacounterpartywillbeunabletopayamountsinfull

whendue.TheGroupstructuresthelevelsofcreditriskitundertakesbyplacinglimitsontheamountofriskacceptedinrelationtoonecounterparty,borrower,orgroupsofborrowers,andtogeographicalandindustrysegments.Suchrisksaremonitoredonarevolvingbasisandsubjecttoanannualormorefrequentreview.

Theexposuretoanyonecounterpartyincludingbanksandbrokersisfurtherrestrictedbysub-limitscoveringonandoff-balancesheetexposuresanddailydeliveryrisklimitsinrelationtotradingitemssuchasforwardforeignexchangecontracts.Actualexposuresagainstlimitsaremonitoreddaily.

Exposuretocreditriskismanagedthroughregularanalysisoftheabilityofborrowersandpotentialborrowerstomeetinterestandcapitalrepaymentobligationsandbychangingtheselendinglimitswhereappropriate.Exposuretocreditriskisalsomanagedinpartbyobtainingcollateralincludingcorporateandpersonalguarantees.

Derivatives TheGroupmaintainsstrictcontrollimitsonnetopenderivativepositions,thatis,thedifferencebetweenpurchase

andsalecontracts,bybothamountandterm.AtanyonetimetheamountsubjecttocreditriskislimitedtothecurrentfairvalueofinstrumentsthatarefavorabletotheGroup(i.e.assets),whichinrelationtoderivativesisonlyasmallfractionofthecontractornotionalvaluesusedtoexpressthevolumeofinstrumentsoutstanding.Thiscreditriskexposureismanagedaspartoftheoveralllendinglimitswithcustomers,togetherwithpotentialexposuresfrommarketmovements.Long-datedderivativeexposures,primarilyinterestrateandforeigncurrencyswaps,usuallyhavebilateralmarginrequirements,setatnominalthresholds,tominimisecounterpartycreditexposure.

Masternettingarrangements The Group further restricts its exposure to credit losses by entering into master netting arrangements with

counterpartieswithwhichitundertakesasignificantvolumeoftransactions.Masternettingarrangementsdonotgenerallyresultinanoffsetofbalancesheetassetsandliabilitiesastransactionsareusuallysettledonagrossbasis.However,thecreditriskassociatedwithfavorablecontractsisreducedbyamasternettingarrangementtotheextentthatifaneventofdefaultoccurs,allamountswiththecounterpartyareterminatedandsettledonanetbasis.TheGroup’soverallexposuretocreditriskonderivativeinstrumentssubjecttomasternettingarrangementscanchangesubstantiallywithinashortperiodsinceitisaffectedbyeachtransactionsubjecttothearrangement.

Creditrelatedcommitments Theprimarypurposeoftheseinstrumentsistoensurethatfundsareavailabletoacustomerasrequired.Guarantees

andstandbylettersofcredit,whichrepresentirrevocableassurancesthattheGroupwillmakepaymentsintheeventthatacustomercannotmeetitsobligationstothirdparties,carrythesamecreditriskasloans.Documentaryandcommerciallettersofcredit,whicharewrittenundertakingsbytheGrouponbehalfofacustomerauthorisingathirdpartytodrawdraftsontheGroupuptoastipulatedamountunderspecifictermsandconditions,arecollateralisedbytheunderlyingshipmentsofgoodsorappropriateassetstowhichtheyrelateandthereforecarrylessriskthanadirectborrowing.

Commitmentstoextendcreditrepresentunusedportionsofauthorisationstoextendcredit intheformof loans,guaranteesorlettersofcredit.Withrespecttocreditriskoncommitmentstoextendcredit,theGroupispotentiallyexposedtolossinanamountequaltothetotalunusedcommitments.However,thelikelyamountoflossislessthanthetotalunusedcommitmentssincemostcommitmentstoextendcreditarecontingentuponcustomersmaintainingspecificcredit standards. TheGroupmonitors the termofmaturityof credit commitmentsbecause longer-termcommitmentsgenerallyhaveagreaterdegreeofcreditriskthanshorter-termcommitments.


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Maximumexposuretocreditrisk The following table shows themaximumexposure to credit risk for the componentsof thebalance sheet. The

maximumexposureisshowngross,beforetheeffectofmitigationthroughtheuseofmasternettingandcollateralarrangements.

Gross maximum exposure 2009 2008 $ $ BalanceswithCentralBanks 356,172 358,900Duefrombanks 850,587 496,076Derivativefinancialinstruments 1,575 2,144Financialassetsatfairvaluethroughprofitorloss -Governmentbonds — 4,869-Corporatebonds — 65,859-Asset-backedsecurities — 464,203-Interestreceivable — 1,286Investmentsecurities -Governmentdebtsecurities 904,965 817,204-Otherdebtsecurities 821,251 1,147,904-Interestreceivable 16,924 38,590Loansandadvancestocustomers -Mortgages 2,513,417 2,496,184-Personalloans 760,210 823,421-Businessandgovernmentloans 3,805,058 3,642,003-Interestreceivable 30,962 30,017Other assets 45,536 59,934 Total 10,106,657 10,448,594 Off-balancesheetexposures 1,011,604 1,069,298 Total credit risk exposure 11,118,261 11,517,892


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C. Geographical concentration of assets, liabilities, off-balance sheet items, revenues and capital expenditure

Thefollowingtablereflectsadditionalgeographicalconcentrationinformation.

Total Total Off-balance Capital assets liabilities sheet items Revenues expenditure $ $ $ $ $October 31, 2009 Barbados 2,776,476 1,886,217 224,062 239,043 4,408Bahamas 3,247,194 2,595,134 252,722 208,855 2,308Cayman 1,802,882 1,398,173 135,760 125,252 456EasternCaribbean 1,014,736 895,633 118,020 97,241 2,774Jamaica 603,264 513,401 73,526 77,426 2,477BVI 883,730 796,353 23,359 22,263 383Belize 128,287 107,487 19,873 15,651 —Curacao 531,883 458,483 25,717 25,537 149Other 1,412,126 1,326,018 138,565 88,890 1,802

12,400,578 9,976,899 1,011,604 900,158 14,757Eliminations (1,898,001) (993,091) — (150,609) — 10,502,577 8,983,808 1,011,604 749,549 14,757

Total Total Off-balance Capital assets liabilities sheet items Revenues expenditure $ $ $ $ $October 31, 2008 Barbados 2,907,070 2,001,867 211,409 220,290 6,795Bahamas 3,553,576 2,970,085 302,620 241,723 2,419Cayman 2,134,771 1,821,835 147,487 126,383 540EasternCaribbean 1,083,681 1,002,136 140,362 102,857 1,520Curacao 663,842 570,813 71,020 81,075 2,297Jamaica 702,439 626,482 24,434 38,324 1,352BVI 130,340 108,974 21,223 15,446 184Belize 536,729 475,075 28,448 39,464 957Other 1,477,409 1,347,742 122,295 81,418 1,440

13,189,857 10,925,009 1,069,298 946,980 17,504Eliminations (2,249,703) (1,320,650) — (131,753) — 10,940,154 9,604,359 1,069,298 815,227 17,504

Capitalexpenditure isshownbygeographicalarea inwhichthepropertyandequipmentor intangibleassetsarelocated.


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D. Credit rating system and credit quality per class of financial assets

CreditQuality AmappingbetweentheGroup’s internal ratingsandtheratingsusedbyexternalagencies isshown inthetable

below.AspartoftheGroup’srisk-ratingmethodology,theriskassessedincludesareviewofexternalratingsoftheobligor.TheobligorratingassessmenttakesintoconsiderationtheGroup’sfinancialassessmentoftheobligor,theindustry,andtheeconomicenvironmentof thecountry inwhichtheobligoroperates. Incertaincircumstances,whereaguaranteefromathirdpartyexists,boththeobligorandtheguarantorwillbeassessed.

Quality per FCIB Standard & Poor’s equivalent Moody’s Investor Services Highgrade AAAtoBBB- AaatoBaa3 Standard BB+toB- BatoB3 Substandard CCC+toCC Caa1toCa Impaired D C

AcreditscoringmethodologyisusedtoassistintheadjudicationofloansforPersonalcustomersandagradingmodelisusedforCorporateclients.

TheeffectivenessoftheriskratingsystemandtheparametersassociatedwiththeriskratingsaremonitoredwithinCreditRiskManagementandaresubjecttoanannualreview.

Thecreditqualityoffinancialassetsismanagedusinginternalcreditratings.

With the exception of investment securities amounting to $52,181 that are classified as substandard, all othersecuritiesarestandardorhighgrade.


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D. Credit rating system and credit quality per class of financial assets (continued)

Thetablebelowshowsthecreditqualitybyclassofassetforgrossloansandadvancestocustomers,basedonanageinganalysisoftheportfolio,akeymeasureofcreditqualityasdescribedabove.Amountsprovidedarebeforeallowanceforcreditlosses,andaftercreditriskmitigation,valuationadjustmentsrelatedtothefinancialguarantors,andcollateralonagreements.

Performing Sub High Standard Standard Notes Grade Grade Grade Impaired Total $ $ $ $ $ October 31, 2009

Grade description Loansandadvancestocustomers -Mortgages 2,154,605 60,303 86,168 212,341 2,513,417-Personalloans 647,556 13,023 18,863 80,768 760,210-Businessandgovernmentloans 3,305,999 53,634 173,908 271,517 3,805,058 Total 14 6,108,160 126,960 278,939 564,626 7,078,685

Performing Sub High Standard Standard Notes Grade Grade Grade Impaired Total $ $ $ $ $

October 31, 2008

Grade description Loansandadvancestocustomers-Mortgages 2,261,953 43,898 47,428 142,905 2,496,184-Personalloans 724,847 12,793 16,614 69,167 823,421-Businessandgovernmentloans 3,324,418 24,124 131,612 161,849 3,642,003 Total 14 6,311,218 80,815 195,654 373,921 6,961,608

E. Market risk

Marketriskistheriskthatthefairvalueoffuturecashflowsoffinancialinstrumentswillfluctuateduetothechangesinthemarketvariables.Marketriskarisesfrompositionsinsecuritiesandderivativesaswellasfromourcoreretail,wealthandcorporatebusinesses.ThekeyriskstotheGroupareforeignexchange,interestrateandcreditspread.MarketRiskwithintheBankisacentralisedgroup.ThismirrorsthewaythatthehardcurrenciesaremanagedbyTreasurySalesandTradingandalthoughthelocalcurrenciesarehandledintheirrespectiveregionsthesearestillmonitored,measuredandcontrolledfromamarketriskperspective,centrally.TheGroupclassifiesmarketriskexposures intotradingandnon-trading,withalloftheformerrepresentedbyproductstradedandmanagedbyanexternalglobalinvestmentmanager.Duringfiscal2009theGroupsolditstradingassetsundermanagement.Duetothesmallsizeofthetradingportfoliopriortoitssale,thekeytypesofmeasuresusedformarketriskarenotsegregatedfromthenontradingbook,thereforethefollowingsectionsgiveacomprehensivereviewoftheGroup’sentireexposures.


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E. Market risk (continued)

Policiesandstandards:TheGrouphasacomprehensivepolicyformarketriskmanagementwhichincorporatesidentification,measurement,monitoringandcontrolofthoserisks.ThispolicyisreviewedandapprovedannuallybytheRiskandConductReviewCommittee.Thepolicy includes theannualapprovalof theBoard limitswhich isusedby theGroup toestablishexplicitrisktolerancesexpressedintermsofthefourmainriskmeasuresmentionedbelow.Thereisathreetieredapproachto limitsattheGroup.Thehighest levelarethosesetattheBoard level,belowthese,arethosewhichareinclusiveofa“haircut”fromtheBoardlimitsandareatamoregranularlevel,relatingtotheChiefRiskOfficerlimits.ThethirdleveloflimitisfortheTreasurySalesandTradingGroupwhichlimitstraderstospecificsizeofdeal,documentedthroughaformaldelegationletterandmonitoredusingtheGroup’streasurysystem.

Processandcontrol: Marketriskmeasuresaremonitoredwithdifferingdegreesoffrequencydependentupontherelativeriskandspeed

withwhichtheriskchanges.FXpositions,ValueatRisk(VaR),certainprofitandlossmeasuresareallmeasureddailywhereasotherssuchasstresstestsandcreditspreadsensitivityareperformedonatleasteitheraweeklyormonthlybasis.DetailedmarketriskcompliancereportsareproducedandcirculatedtoseniormanagementonamonthlybasisandasummaryversionisincludedinthequarterlyGroupTemperaturereportsuppliedtotheBoard.

Riskmeasurement TheGrouphasfourmainmeasuresofmarketriskwhichareasfollows:

•Outrightposition,usedpredominantlyforFX •Sensitivitytoa1basispointmoveinacurve,usedforbothinterestrateandcreditspreadrisk •ValueatRisk(VaR)measuresforbothinterestrateriskandfornonpeggedcurrencies •Stressscenariosbaseduponacombinationoftheoreticalsituationsandhistoricalevents

Position ThisriskmeasurementisusedpredominantlyfortheGroup’sforeignexchangebusiness.Themeasureproducedand

reporteddailyfocusesupontheoutrightlongorshortpositionineachcurrencyfrombothapre-structuralandpoststructuralbasis.AnyforwardcontractsorFXswapsarealsoincorporated.

Sensitivity ThetwomainmeasuresutilisedbythebankaretheDV01(deltavalueofa1basispointmove,alsoknownasthe

PV01orPresentvalueofa1basispointmove)andtheCSDV01(CreditSpreadDeltaofa1basispointmove).TheDV01measureiscalculatedfora1basispointmovedownintheyieldcurve.Thisgeneratestheeffectonearningsbyindividualcurrencyofaparallelshiftdownintherelatedyieldcurve.Ascurvesrarelymoveinaparallelfashionitismeasuredacrossdifferenttenorstoensurethatthereisnotfurthercurveriskofhavingforexamplealongpositionintheshortendofthecurveoffsetbyashortpositioninthelongertenors.Thisisthenutilisedwithinthescenarioanalysis. The sensitivities are calculated using two different approaches, a pre structural basis that focuses uponpredominantlycontractualdatepositionsandapoststructuralbasisthatconsiderscorebalancesfornoncontractualmaturitiesaswellasassigningrisktocapitalandnonproductgeneralledgeraccountsandconsideringmarketspecificpricingsituations.

TheCSDV01sensitivitylooksattheriskofthespreadsbetweentheUSDdenominated,locallyissuedbondportfolioandthebenchmarkUSDinterestratecurvewideningornarrowingaswellastolookattheeffectofthatsametypeofcreditspreadmoveimpactingthevalueoftheUSDstructuralhedgepositions.

ValueatRisk TheGroup’sVaRmethodologyutilises the testedandvalidatedCIBCparentmodels. It is a statistical,probability

basedapproachthatusesvolatilitiesandcorrelationstoquantifyriskintodollarterms.VaRmeasuresthepotentiallossfromtheadversemarketmovementsthatcanoccurovernightwithalessthan1%probabilityofoccurringundernormalmarketconditions,basedonequallyweightedhistoricaldata.VaRusesnumerousriskfactorsasinputsandiscomputedthroughtheuseofhistoricalvolatilityofeachriskfactorandtheassociatedcorrelationsamongthem,evaluatedovera1yearperiodandupdatedonaregularbasis.Theuseofthesehistoricalmeasuresdocauseadegreeoflimitationtoitsaccuracyasitassumesthatfuturepricemovementswillfollowastatisticaldistributionandthusmaynotclearlypredictthefutureimpact.AfurtherweaknessoftheVaRmeasureisthatitdoesnotestimatetheeffectsofmarketvariablemovesoutsideofthe99%parameterandhencemayunderestimatelosses.Tocounterthis,theBankhasvariousstressmeasurestocalculatepotentialtaileventlosses.


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Stresstesting&scenarioanalysis Stress testingand scenarioanalysis aredesigned toadd insight topossibleoutcomesofabnormal (or tail event)

marketconditionsandtohighlightwhereriskconcentrationscouldbeaconcern.

TheGrouphastwodistinctapproachestothiswhichareasfollows:

• ForthehardcurrencytestingitsendsitspositionsensitivitytoCIBCandutilisesthesuiteofmeasuresthatCIBChasdeveloped.Thestresstestingmeasurestheeffectonthehardcurrencyportfoliovaluesoverawiderangeofextrememovesinmarketprices.Thestresstestingmethodologyassumesnoactionsaretakenorareabletobetakenduringtheeventtomitigatetherisk,reflectingthedecreasedliquiditythatfrequentlyaccompaniesmarketshocks. The scenario analysis approach again for theGroup’s hard currency exposures simulate an impact onearningsofextrememarketeventsuptoaperiodofonequarter.Scenariosaredevelopedusingactualhistoricaldataduringperiodsofmarketdisruption, or arebaseduponhypothetical occurrenceof economicorpoliticaleventsornaturaldisastersandaredesignedbyCIBC’seconomists,businessleadersandriskmanagers.

• The localcurrencystresstestsaredesignedonasimilarbutsmallerscale.For interestratestresses,MarketRiskinconjunctionwithTreasurySales&Tradingconsiderthemarketdataoverapproximatelythelast10yearsandidentify thegreatestcurveordatapointmovesoverbothsixtyandsingledays.Theseare thenappliedto theexistingpositions/sensitivitiesofthebank.Thisisperformedandreportedonamonthlybasisastheydonottendtochangerapidly.Forforeignexchangestresses,theGroupconsiderswhattheeffectofacurrencycomingoffapegwouldhaveontheearningsoftheGroup.Thisislargelyjudgmental,asithashappenedsoinfrequentlyintheregionanditissupplementedbysomehistoricalreviewsbothwithintheregionandinotherareaswherepeggedcurrencyregimeshaveordoexist.

Interestraterisk Non-tradinginterestrateriskconsistsprimarilyofacombinationoftherisksinherentinassetandliabilitymanagement

activitiesandtheactivitiesofthecoreretail,wealthandcorporatebusinesses.Interestrateriskresultsfromdifferencesinthematuritiesorre-pricingdatesofassetsbothonandoffbalancesheet.

Thefollowingtableshowsthepotentialimpactofanimmediate100basispointincreaseordecreaseininterestrates.

2009 2008 $ $100bp increase in interest rates Impactonnetinterestincome 9,500 5,100Impactonshareholders’equity 6,500 (10,700) 100bpdecreaseininterestratesImpactonnetinterestincome (9,500) (5,100)Impactonshareholders’equity (6,500) 10,700

Inadditiontotheprevioustable,asdescribedearlier,theGrouputilisesacombinationofhighlevelBoardmeasuresandlimitstomonitorriskaswellasthemoregranularChiefRiskOfficer’smeasurementsandlimits.ThekeyinterestriskmeasuresareshowninthetablesbelowwiththeCROtablebeingasubsethighlightingthecurrencieswheretheGrouphastheirmoresignificantinterestrateexposures.


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Market risk metrics 2009 2008 $ $ InterestrateVaR–Hardcurrency 1,776 1,371InterestrateVaR–Localcurrency 183 326InterestrateVaR–Total 1,826 1,534Interestratestress–Hardcurrency1day 4,445 5,419Interestratestress–Hardcurrency60days 24,454 12,857Interestratestress–Localcurrency60days 17,610 9,207DV01Hardcurrency (147) 6DV01Localcurrency 83 101

2009 2008 60 day 60 day stressed stressedCurrency DV01 Var Loss DV01 VaR Loss $ $ $ $ $ $ UnitedStatesdollars (123) 1,716 24,454 30 984 12,857Trinidad&Tobagodollars 6 27 1,121 11 12 1,201Barbadosdollars 74 61 4,761 53 156 2,834Bahamasdollars 66 118 1,954 68 11 82Jamaicandollars (15) 209 3,036 (11) 59 2,118EasternCaribbeandollars (21) 90 1,852 (17) 317 326

Note:DV01aboveareshownonapoststructuralbasisandbracketshighlightashortposition.

Creditspreadrisk Creditspreadexistsasthebenchmarkcurveandthereferenceassetcurveseitherconvergeordiverge.TheGrouphas

2portfoliosthathaveamaterialamountofcreditspreadrisk.TheriskismeasuredusinganestimatedCSDV01andstressscenarios.Theresultsofthesearereportedmonthlytoseniormanagement.

2009 2008 CSDV01 Stressed CSDV01 Stressed Notional (a) Loss (a) Notional (a) Loss (a) $ $ $ $ $ $ Localissuedhardcurrencydenominatedbondportfolio 499,700 313 74,300 550,119 324 25,401 Structuralinterestratehedgeportfolio(bankpaper) 583,700 153 30,700 923,715 283 56,560

(a)forthelocallyissueddebt,baseduponover85%oftheportfoliobynotional.

Largechangeinstresstestresultduetoadjustmentsmadetoscenariosinearly2009toreflecthistoricwideningofspreads.


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DerivativesheldforALMpurposes Wherederivativesareheldashedgesagainsteither sizeable loans fromcorebusinessesor to reduce interest risk

exposuretoUSDdenominatedlocalbondissuesandifthetransactionsmeettheregulatorycriteriathentheBankappliesforhedgeaccounting.Derivativehedgesthatdonotqualifyforhedgeaccountingtreatmentareconsideredtobeeconomichedgesandarerecordedatmarketvalueonthebalancesheetwithchangesinthefairvaluereflectedthroughtheprofitandloss.Itshouldbenotedthattheseareonlyinterestrateriskhedgesandotherriskssuchascreditspreadontheunderlyingstillexistandaremeasuredseparately.

Foreignexchangerisk Foreignexchange(orcurrency)riskisdefinedastheriskthatthevalueofafinancialinstrumentwillfluctuateasa

resultofchangesinforeignexchangerates.AsignificantnumberoftheregionalcurrenciesarepeggedtotheUSDandhencetheVaRmeasureisnotappropriateandthatiswhymoreemphasisisputupontheoverallpositionlimitandrelatedstresstests.TheBoardhassetlimitsonpositionsbycurrency.PositionsaremonitoredonadailybasisandTreasurySales&TradingaresolelyresponsibleforthehedgingoftheexposureoftheGroup.

ThefollowingtablehighlightsthecurrenciesthattheGrouphadsignificantexposurestoatOctober31,2009.ItalsohighlightsthemeasuresusedbytheBanktomeasure,monitorandcontrolthatrisk.

2009 2008 Position Position long/(short) long/(short) against Stressed against StressedCurrency uSD VaR Loss uSD Var Loss $ $ $ $ $ $ Caymandollars 57,775 N/A 5,778 133,273 N/A 13,327Trinidad&Tobagodollars (4,404) 52 352 (4,255) 44 340Barbadosdollars 30,121 N/A 9,036 (7,270) N/A 582Jamaicandollars (25,436) 457 2,035 5,051 28 2,020EasternCaribbeandollars 16,381 N/A 4,914 20,528 N/A 6,158

TheGroupalsousesameasure toquantifynon trading foreignexchange risk, also referred toaspost structuralforeignexchangerisk.ThisconsiderstheeffectofcurrencychangeontheBank’sinvestmentinforeignoperations,retainedearningsandprofitderivedthroughouttheyearinnonUSD.DuetothesizeofinvestmentsintheBahamas,Cayman,theEasternCaribbeanandJamaicathissignificantlyincreasestheBank’slongexposuretothesecurrencies.


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Concentrations of assets, liabilities and off balance sheet positions

October 31, 2009 EC BDS CAY BAH uS JA Other Total $ $ $ $ $ $ $ $Assets CashandbalanceswithCentralBanks 90,730 47,609 4,198 79,718 64,688 69,424 69,262 425,629Duefrombanks 3,290 (78,028) 66 15,589 215,464 202 694,004 850,587Derivativefinancialinstruments — — — — 1,406 165 4 1,575Otherassets (100,991) 39,607 4,447 16,621 59,161 7,357 19,334 45,536Taxationrecoverable 8,076 999 — — 14 — — 9,089Investmentsecurities 29,164 252,833 — 186,128 1,018,933 27,384 229,248 1,743,690Loansandadvancestocustomers 739,951 715,986 447,738 1,368,851 3,206,436 161,451 265,063 6,905,476Propertyandequipment 13,744 43,554 16,482 20,140 14,788 7,440 4,840 120,988Deferredtaxassets 2,139 6,031 — — — 86 4,731 12,987Retirement benefit assets 7,209 11,463 — 11,343 4,260 9,416 1,779 45,470Intangibleassets — 305,535 — — 36,015 — — 341,550 Totalassets 793,312 1,345,589 472,931 1,698,390 4,621,165 282,925 1,288,265 10,502,577 Liabilities Derivativefinancialinstruments — — — — 87,071 — 13 87,084Customerdeposits 694,106 1,317,601 178,246 1,256,780 3,544,609 210,134 1,456,877 8,658,353Otherborrowedfunds — — — — 13,879 — 24,610 38,489Otherliabilities (47,805) 33,242 78,110 (13,545) 29,850 2,518 (28,122) 54,248Taxationpayable 741 920 — — 1,516 1,108 4,787 9,072Deferredtaxliabilities 151 112 — — 253 2,417 952 3,885Debtsecuritiesinissue — — — — 93,560 — 31,062 124,622Retirement benefit obligations 793 1,418 — 4,189 1,056 486 113 8,055 Totalliabilities 647,986 1,353,293 256,356 1,247,424 3,771,794 216,663 1,490,292 8,983,808 Net on balance sheet position 145,326 (7,704) 216,575 450,966 849,371 66,262 (202,027) 1,518,769 Off balance sheet position 108,544 198,421 57,163 112,927 409,251 47,221 78,077 1,011,604


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Concentrations of assets, liabilities and off balance sheet positions (continued)

October 31, 2008 EC BDS CAY BAH uS JA Other Total $ $ $ $ $ $ $ $Assets CashandbalanceswithCentralBanks 92,424 78,350 3,237 16,484 100,529 90,822 106,964 488,810Duefrombanks 9,600 (34,803) (104) 75,036 (36,678) (17,714) 500,739 496,076Derivativefinancial instruments — — — — 2,144 — — 2,144Financialassetsatfairvaluethroughprofitorloss — — — — 536,217 — — 536,217Otherassets (24,944) (62,107) 1,434 11,419 127,338 19,067 (12,273) 59,934Taxationrecoverable 5,718 466 — — — — — 6,184Investmentsecurities 29,600 240,447 4 182,734 1,306,092 16,613 228,779 2,004,269Loansandadvancestocustomers 745,830 712,157 465,097 1,407,954 3,062,379 202,348 218,513 6,814,278Propertyandequipment 14,707 45,058 17,294 20,334 15,657 7,268 6,838 127,156Deferredtaxassets 2,643 6,497 — — — 127 6,501 15,768Retirement benefit assets 6,800 9,806 — 10,845 4,535 11,203 1,616 44,805Intangibleassets — 305,535 — — 38,978 — — 344,513 Totalassets 882,378 1,301,406 486,962 1,724,806 5,157,191 329,734 1,057,677 10,940,154 Liabilities Derivativefinancialinstruments — — — 461 52,053 1,972 1,094 55,580Customerdeposits 731,861 1,248,628 201,569 1,735,907 4,001,906 212,268 1,063,910 9,196,049Otherborrowedfunds — — — — — — 23,735 23,735Otherliabilities 21,132 13,730 131,897 (6,884) 49,284 10,056 (152,250) 66,965Taxationpayable 6,826 150 — — 2,228 3,604 1,223 14,031Deferredtaxliabilities 58 173 — — 9 2,290 (1,010) 1,520Debtsecuritiesinissue — — — 13 200,326 6,600 31,593 238,532Retirement benefit obligations 719 1,353 — 4,113 871 808 83 7,947 Totalliabilities 760,596 1,264,034 333,466 1,733,610 4,306,677 237,598 968,378 9,604,359 Net on balance sheet position 121,782 37,372 153,496 (8,804) 850,514 92,136 89,299 1,335,795 Off balance sheet position 132,187 167,371 34,008 147,695 462,574 41,148 84,315 1,069,298


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F. Cash flow and fair value interest rate risk

Cashflowinterestraterisk istheriskthatthefuturecashflowsofafinancial instrumentwillfluctuatebecauseofchangesinmarketinterestrates.Fairvalueinterestrateriskistheriskthatthevalueofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestrates.TheGrouptakesonexposuretotheeffectsoffluctuationsintheprevailinglevelsofmarketinterestratesonbothitsfairvalueandcashflowrisks.Interestmarginsmayincreaseasaresultofsuchchangesbutmayreduceorcreatelossesintheeventthatunexpectedmovementsarise.Limitsaresetonthelevelofmismatchofinterestraterepricingthatmaybeundertaken,whicharemonitoredonanongoingbasis.

Expectedrepricingandmaturitydatesdonotdiffersignificantlyfromthecontractdates,exceptforthematurityofdepositsupto1month,whichrepresentbalancesoncurrentaccountsconsideredbytheGroupasarelativelystablecoresourceoffundingforitsoperations.

G. Liquidity risk

LiquidityriskarisesfromtheGroup’sgeneralfundingactivitiesinthecourseofmanagingassetsandliabilities.Itistheriskofhavinginsufficientcashresourcestomeetcurrentfinancialobligationswithoutraisingfundsatunfavourableratesorsellingassetsonaforcedbasis.

TheGroup’sliquiditymanagementstrategiesseektomaintainsufficientliquidfinancialresourcestocontinuallyfundthebalancesheetunderbothnormalandstressedmarketenvironments.

ProcessandControl Actualandanticipatedinflowsandoutflowsoffundsgeneratedfromonandoffbalancesheetexposuresaremanaged

onadailybasiswithinspecificshorttermasset/liabilitymismatchlimitsbyoperationalentity.

Potentialcashflowsundervariousstressscenariosaremodelledusingbalancesheetpositions.Onaconsolidatedbasis, prescribed liquidity levels under a selectedbenchmark stress scenario aremaintained for aminimum timehorizon.

RiskMeasurement TheGroup’sliquiditymeasurementsystemprovidesdailyliquidityriskexposurereportsformonitoringandreviewby

theTreasurydepartment.TheGroup’sAssetsandLiabilitiesCommittee–ALCOisresponsibleforrecommendingtheliquidityratiotargets,thestressscenariosandthecontingencyfundingplans.

TheGroupmanagesliquidityriskbymaintainingasignificantbaseofcorecustomerdeposits,liquidassetsandaccesstocontingentfundingaspartofitsmanagementofrisk.EachoperationalentityhasinternallyestablishedspecificliquidityrequirementsthatareapprovedbytheGroupALCOandreviewedannually.


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G. Liquidity risk (continued)

Thetablebelowanalysesassets,liabilitiesandoffbalancesheetpositionsoftheGroupintorelevantmaturitygroupingsbasedontheremainingperiodatbalancesheetdatetothecontractualmaturitydate.

0-3 3-12 1-5 Over 5 months months years years TotalOctober 31, 2008 $ $ $ $ $ Assets CashandbalanceswithCentralBanks 410,677 14,952 — — 425,629Duefrombanks 373,391 258,754 218,442 — 850,587Derivativefinancialinstruments 1,575 — — — 1,575Otherassets 43,115 2,421 — — 45,536Taxationrecoverable 9,089 — — — 9,089Investmentsecurities 165,480 131,398 925,488 521,324 1,743,690Loansandadvancestocustomers 907,236 481,127 1,418,941 4,098,172 6,905,476Propertyandequipment — — 24,917 96,071 120,988Deferredtaxassets 4,025 533 259 8,170 12,987Retirementbenefitassets — — — 45,470 45,470Intangibleassets 739 2,219 11,832 326,760 341,550 Totalassets 1,915,327 891,404 2,599,879 5,095,967 10,502,577 Liabilities Derivativefinancialinstruments 76,409 — — 10,675 87,084Customerdeposits 6,303,877 1,760,906 578,340 15,230 8,658,353Otherborrowedfunds 14,280 6,672 949 16,588 38,489Otherliabilities 853 53,395 — — 54,248Taxationpayable 6,354 2,718 — — 9,072Deferredtaxliabilities 60 738 409 2,678 3,885Debtsecuritiesinissue — 93,829 — 30,793 124,622Retirementbenefitobligations — — — 8,055 8,055 Totalliabilities 6,401,833 1,918,258 579,698 84,019 8,983,808 Net on balance sheet position (4,486,506) (1,026,854) 2,020,181 5,011,948 1,518,769 Off balance sheet position 882,742 94,283 23,485 11,094 1,011,604


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G. Liquidity risk (continued)

0-3 3-12 1-5 Over 5 months months years years TotalOctober 31, 2008 $ $ $ $ $ Assets CashandbalanceswithCentralBanks 488,810 — — — 488,810Duefrombanks 408,944 87,132 — — 496,076Derivativefinancialinstruments 2,144 — — — 2,144Financialassetsatfairvaluethroughprofitorloss 536,217 — — — 536,217Otherassets 58,076 1,858 — — 59,934Taxationrecoverable 267 — 5,917 — 6,184Investmentsecurities 1,002,446 33,541 755,784 212,498 2,004,269Loansandadvancestocustomers 1,108,493 610,605 887,262 4,207,918 6,814,278Propertyandequipment — — 20,817 106,339 127,156Deferredtaxassets 1 253 1,459 14,055 15,768Retirementbenefitassets — — — 44,805 44,805Intangibleassets 740 2,219 6,647 334,907 344,513 Totalassets 3,606,138 735,608 1,677,886 4,920,522 10,940,154 Liabilities Derivativefinancialinstruments 50,428 5,152 — — 55,580Customerdeposits 7,571,251 1,560,652 55,913 8,233 9,196,049Otherborrowedfunds 4,104 2,119 708 16,804 23,735Otherliabilities 12,171 — 54,794 — 66,965Taxationpayable 13,754 277 — — 14,031Deferredtaxliabilities 3 — — 1,517 1,520Debtsecuritiesinissue 66 31,450 6,600 200,416 238,532Retirementbenefitobligations — — — 7,947 7,947 Totalliabilities 7,651,777 1,599,650 118,015 234,917 9,604,359 Net on balance sheet position (4,045,639) (864,042) 1,559,871 4,685,605 1,335,795 Off balance sheet position 491,953 223,460 248,128 105,757 1,069,298


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H. Fair values of financial assets and liabilities SetoutbelowisacomparisonbyclassofthecarryingamountsandfairvaluesoftheGroup’sfinancialinstruments

thatarecarriedinthefinancialstatements.Thetabledoesnotincludethefairvaluesofnon-financialassetsandnon-financialliabilities.

unrecognised unrecognised Carrying Fair gain/ Carrying Fair gain/ Value Value (loss) Value Value (Loss) 2009 2009 2009 2008 2008 2008 $ $ $ $ $ $Financial assets CashandbalanceswithCentralBanks 425,629 425,629 — 488,810 488,810 —Duefrombanks 850,587 850,587 — 496,076 496,076 —Derivativefinancialinstruments 1,575 1,575 — 2,144 2,144 —Financialassetsatfairvaluethroughprofitorloss — — — 536,217 536,217 —Investmentsecurities 1,743,690 1,743,690 — 2,004,269 2,004,269 —Loansandadvancestocustomers 6,905,476 6,908,909 3,433 6,814,278 6,759,152 (55,126) Financial liabilities Derivativefinancialinstruments 87,084 87,084 — 55,580 55,580 —Customerdeposits 8,658,353 8,671,748 (13,395) 9,196,049 9,200,907 (4,858)Otherborrowedfunds 38,489 57,718 (19,229) 23,735 29,276 (5,541)Debtsecuritiesinissue 124,622 127,892 (3,270) 238,532 209,250 29,282 Total unrecognised change in unrealised fair value (32,461) (36,243)


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H. Fair values of financial assets and liabilities (continued)

Loans and advances to customers

Loansandadvancestocustomersarestatednetofspecificandotherprovisionsforimpairment.Theestimatedfairvaluesofloansandadvancestocustomersrepresentsthediscountedamountofestimatedfuturecashflowsexpectedtobereceived.

Investment securities

Investment securities are recorded at fair value based either on quoted market prices or valuation techniques,including,modelinputsthatareeitherobservableinthemarketorinvolvestheuseofnon-marketobservableinputs.

Customer deposits and other borrowed funds

Theestimatedfairvalueofcustomerdepositsandotherborrowedfundsisbasedondiscountedcashflowsusingprevailingmoney-marketinterestratesfordebtswithsimilarcreditriskandmaturity.

Debt securities in issue

Thefairvalueiscalculatedusingadiscountedcashflowmodelbasedonacurrentinterestrateyieldcurveappropriatefortheremainingtermtomaturity.

Financial assets and liabilities with carrying values that approximate fair value

Forfinancialassetsandliabilitiesthatareliquidorhaveashort-termmaturity,itisassumedthatthecarryingamountsapproximate to their fair value. This assumption is alsoapplied todemanddeposits savingsaccountswithoutaspecificmaturityandvariableratefinancialinstruments.

34. Principal subsidiary undertakings

Name Country of incorporation FirstCaribbeanInternationalBankLimited BarbadosFirstCaribbeanInternationalWealthManagementBank(Barbados)Limited BarbadosFirstCaribbeanInternationalBank(Barbados)Limited BarbadosFirstCaribbeanInternationalTrustandMerchantBank(Barbados)Limited BarbadosFirstCaribbeanInternationalLandHoldings(Barbados)Limited BarbadosFirstCaribbeanInternationalOperationsCentreLimited BarbadosFirstCaribbeanInternationalFinanceCorporation(Leeward&Windward)Limited St.LuciaFirstCaribbeanInternationalBank(Bahamas)Limited(95.2%) BahamasFirstCaribbeanInternationalFinanceCorporation(Bahamas)Limited BahamasFirstCaribbeanInternational(Bahamas)NomineesCompanyLimited BahamasFirstCaribbeanInternationalLandHoldings(TCI)Limited Turks&CaicosIslandsFirstCaribbeanInternationalBank(Jamaica)Limited(96.3%) JamaicaFirstCaribbeanInternationalSecuritiesLimited JamaicaFirstCaribbeanInternationalBuildingSocietyLimited JamaicaFirstCaribbeanInternationalBank(Trinidad&Tobago)Limited TrinidadFirstCaribbeanInternationalBank(Cayman)Limited CaymanIslandsFirstCaribbeanInternationalFinanceCorporation(Cayman)Limited CaymanIslandsFirstCaribbeanInternational(Cayman)NomineesCompanyLimited CaymanIslandsFirstCaribbeanInternationalFinanceCorporation(NetherlandsAntilles)Limited NetherlandsAntillesFirstCaribbeanInternationalBank(Curacao)N.V. NetherlandsAntillesFirstCaribbeanInternationalWealthManagement(Curacao)N.V. NetherlandsAntillesFirstCaribbeanInternationalWealthManagement(N.A.)N.V. NetherlandsAntilles

Allsubsidiariesarewhollyownedunlessotherwisestated.


80

OwnershipStructure

81

Head OfficeP.O.Box503Warrens,St.MichaelBarbadosTel:(246)367-2300

AnguillaP.O.Box140TheValleyTel:(264)497-2301

AntiguaP.O.Box225HighStreetSt.John’sTel:(268)480-5000

The BahamasP.O.BoxN-8350ShirleyStreet,NassauTel:(242)322-8455

BarbadosP.O.Box405BroadStreet,St.MichaelBridgetownTel:(246)367-2300

BelizeP.O.Box36321AlbertStreetBelizeCityTel:9011+(501)227-7212

British Virgin IslandsP.O.Box70RoadTown,TortolaTel:(284)494-2171/3

Cayman IslandsP.O.Box6825MainStreetGeorgeTownTel:(345)949-7300

CuraçaoP.O.Box3144DeRuyterkade61WillemstadTel:(+599)433-8338

DominicaP.O.Box4OldStreet,RoseauTel:(767)448-2571

GrenadaP.O.Box37ChurchStreet,St.George’sTel:(473)440-3232

JamaicaP.O.Box40323-27KnutsfordBlvdKingston5Tel:(876)929-9310

St. KittsP.O.Box42TheCircus,BasseterreTel:(869)465-2449

St. LuciaP.O.Box335BridgeStreet,CastriesTel:(758)456-1000

St. MaartenP.O.Box94138BackStreetPhilipsburgTel:(599)542-3511

NevisP.O.Box502CharlestownTel:(869)469-5309

Trinidad & Tobago74LongCircularRoad Maraval,TrinidadTel:(868)628-4685

Turks & Caicos IslandsP.O.Box698LeewardHighwayTel:(649)946-5303

St. VincentP.O.Box604HalifaxStreetKingstownTel:(784)456-1706

FINANCIAL CENTRES& TRuST COMPANIES

Corporate Banking CentreP.O.BoxN-7125ShirleyStreetNassau,TheBahamasTel:(242)322-8455

Wealth Management CentreP.O.BoxN-8350ShirleyStreetNassau,TheBahamasTel:(242)302-6000

Finance CorporationP.O.BoxN-8350ShirleyStreetNassau,TheBahamasTel:(242)322-7466

Corporate Banking CentreP.O.Box405RendezvousSt.Michael,BarbadosTel:(246)367-2500

Trust and Merchant Bank1stFloor,CorporateBankingCentreFirstCaribbeanInternationalBankRendezvous,ChristChurch,BarbadosTel:(246)467-2688

Wealth Management CentreP.O.Box180GroundFloor,HeadOfficeWarrens,St.Michael,BarbadosTel:(246)367-2012

Wealth Management Centre23-27KnutsfordBlvdKingston5,JamaicaTel:(876)935-4619

Wealth Management CentreFirstCaribbeanHouseP.O.Box68GTMainStreet,GeorgeTownGrandCaymanCaymanIslandsTel:(345)949-7300

Wealth Management CentreDeRuyterkade61P.O.Box3144Willemstad,CuraçaoNetherlandsAntillesTel:(+599)9433-8000

Wealth Management CentreP.O.Box70Wickham’sCayRoadTown,TortolaBritishVirginIslandsTel:(284)494-2171

Wealth Management CentreP.O.Box236ButterfieldSquareProvidencialesTurks&CaicosIslandsTel:(649)941-3606

Corporate Banking Centre23-27KnutsfordBlvdKingston5,JamaicaTel:(876)929-9310

Building SocietyP.O.Box40523-27KnutsfordBlvdKingston5,JamaicaTel:(876)929-9310

Asset Management & Securities TradingP.O.Box40523-27KnutsfordBlvdKingston5,JamaicaTel:(876)929-9310

Finance CorporationP.O.Box335Castries,St.LuciaTel:(758)452-6371

Trustee Services74LongCircularRoadMaraval,TrinidadTel:(868)628-4685

Capital Markets 74LongCircularRoadMaraval,TrinidadTel:(868)628-4685

MainBranchesandCentres

82

NoticeofMeeting

Annual General Meeting

Notice is hereby given that the Sixteenth Annual GeneralMeetingof theShareholdersof FirstCaribbean InternationalBank Limitedwill be held at the Flamboyant RoomNorth,LloydErskineSandifordConferenceCentre,TwoMileHill,St.Michael,Barbados,onThursday,March25,2010at5p.m.forthefollowingpurposes:

1. To receive audited Financial Statements for the yearendedOctober31,2009andtheReportsoftheDirectorsandAuditorsthereon.

2. ToelectthefollowingDirectors:

(i)PaulaRajkumarsinghforaperiodoftwoyears.

(ii)RichardNesbittforaperiodoftwoyears.

(iii)SoniaBaxendaleforaperiodoftwoyears. 3. Tore-electthefollowingDirectorswhoretirebyrotation

andbeingeligibleseekre-election:

(iv)ThomasWoodsforaperiodofthreeyears.

(v)JohnD.Orrforaperiodofthreeyears.

(vi)DavidRitchforaperiodofthreeyears. 4. ToappointtheAuditorsandtoauthorisetheDirectorsto

fixtheirremuneration.

5. To discuss any other business which may be properlyconsideredattheAnnualGeneralMeeting.

ByOrderoftheBoardofDirectors

EllaN.HoyosCorporateSecretaryJanuary31,2010

ProxiesShareholdersoftheCompanyentitledtoattendandvoteatthemeetingareentitledtoappointoneormoreproxiestoattend and, in a poll, vote instead of them. A proxy neednotalsobeashareholder.AnyinstrumentappointingaProxymust be received at the office of the Registrar & TransferAgent, FirstCaribbean International Trust and MerchantBank (Barbados) Limitednot less than48hours before themeeting.Memberswho return completed proxy forms arenotprecluded,subsequentlyiftheysowish,fromattendingtheMeetinginsteadoftheirproxiesandvotinginperson.

In the event of a poll, their Proxies’ votes lodgedwith theRegistrar&TransferAgentwillbeexcluded.

DividendA final dividend of US$0.03 per share was approved forthe year ended October 31, 2009 and paid on January29,2010, to theholdersofCommonShareswhosenameswereregisteredinthebooksoftheCompanyatthecloseofbusinessonDecember17,2009.

An interimdividendofUS$0.03persharewasalsopaidonJune30,2009toholdersofCommonShareswhosenameswereregisteredinthebooksoftheCompanyatthecloseofbusinessonJune10,2009.

Total dividends for the 2009 financial year amounted toUS$0.06pershare.

Documents Available for Inspection:

TherearenoservicecontractsgrantedbytheCompany,oroursubsidiarycompanies,toanyDirector.

Registered Office: Warrens,St.Michael.Barbados,WestIndies

83

Directors’Report

DirectorsDuring the year under review, there were no resignationsfrom the Board of Directors of the Company. Mrs. PaulaRajkumarsingh,Mr.RichardNesbittandMsSoniaBaxendaleservedtheirfirstfullyearasDirectorsoftheCompany.

The shareholders are now being asked to re-appoint Mrs.Rajkumarsingh,Mr.NesbittandMsBaxendaletotheBoardofDirectorsforafurthertwoyearseach.Theyarealsoaskedto re-appoint as Directors, to the Board of Directors, Mr.ThomasWoods,Mr. JohnD.OrrandMr.DavidRitch,whoretirebyrotationandbeingeligibleofferthemselves forre-electionforaperiodofthreeyears.

Directors’ InterestAsatOctober31,2009,particularsofDirectors’shareholdingsintheissuedcapitaloftheCompanyareasfollows:

CommonSharesofNoParValue Beneficial Non Beneficial Interest Interest

1. MichaelMansoor 220,334 nil2. JohnD.Orr nil3. G.DianeStewart (IndependentDirector) nil nil4. SirAllanFields (IndependentDirector) 1,000 nil5. SirFredGollop 1,416 nil6. ThomasWoods nil nil7. RichardNesbitt nil nil8. DavidWilliamson nil nil9. PaulaRajkumarsingh (IndependentDirector) nil nil10.DavidRitch (IndependentDirector) nil nil11.SoniaBaxendale nil nil12.RichardVenn (AlternateDirector) nil 1,000

Financial Results and DividendsThe Directors report that the Company’s consolidated netincomeattributabletotheequityholdersoftheparentfortheyearendedOctober31,2009amountedtoUS$171million.All statutory requirements for the year ended October 31,2009havebeenfulfilled.

TheCompanyhasdeclaredafinaldividendofUS$0.03pershare for the period ended October 31, 2009. An interimdividendofUS$0.03persharewasalsopaidinthe2009fiscalperiod.TotaldividendsfortheyearwereUS$0.06pershare.

Share Capital CIBC Investments (Cayman) Limited (CICL) is themajorityshareholder of the Company now holding 91.39% of theCompany’sissuedandoutstandingshares.

SubstantialinterestasatOctober31,2009*

Commonsharesofnoparvalue

CIBCInvestments(Cayman)Limited1,393,807,449 (91.39%) *Substantial interestmeansaholdingof5%ormoreoftheCompany’sissuedsharecapital.

AuditorsMessrs. Ernst and Young, Chartered Accountants, servedas external auditorsof theCompany for the2009financialyear.Aresolutionrelatingtothere-appointmentofErnstandYoungasAuditorswillbeproposedattheAnnualMeetingoftheShareholdersoftheCompany.

ByOrderoftheBoard

Ella N. HoyosCorporateSecretary

84

ManagementProxyCircular

BarbadosTheCompaniesAct,Chapter308[Section140]

1. NameofCompany: FirstCaribbeanInternationalBankLimited CompanyNo.8521

2. ParticularsofMeeting: SixteenthAnnualMeetingoftheShareholdersoftheCompanytobeheldattheFlamboyantNorthRoom,LloydErskine

SandifordConferenceCentre,TwoMileHill,St.MichaelonThursday,March25,2010at5p.m.

3. Solicitation: ItisintendedtovotetheProxyherebyissuedbytheManagementoftheCompany(unlesstheShareholderdirectsotherwise)

infavourofallresolutionsspecifiedontheProxyFormsenttotheShareholderswiththisCircularandintheabsenceofaspecificdirection,inthediscretionoftheProxyHolderinrespectofanyotherresolution.

4. AnyDirector’sStatementSubmittedPursuanttoSection71(2): NostatementhasbeenreceivedfromanyDirectoroftheCompanypursuanttoSection71(2)oftheCompaniesAct,

Chapter308.

5. AnyAuditor’sStatementSubmittedPursuanttoSection163(1): NostatementhasbeenreceivedfromtheAuditorsoftheCompanypursuanttoSection163(1)oftheCompaniesAct,

Chapter308.

6. AnyShareholder’sProposalSubmittedPursuanttoSection112: NoproposalhasbeenreceivedfromanyShareholderpursuanttoSection112oftheCompaniesAct,Chapter308.

Date NameandTitle SignatureJanuary31,2010 EllaN.Hoyos CorporateSecretary FirstCaribbeanInternational BankLimited

85

ProxyForm

I/We,theundersignedshareholder/shareholdersofFirstCaribbeanInternationalBankLimitedherebyappointMr.Michael

Mansoororfailinghim,Mr.JohnOrr,oranyDirectoroftheCompanyor

Asmy/ourproxytovoteforme/usonmy/ourbehalfasindicatedbelowontheResolutionstobe

proposedattheAnnualMeetingoftheshareholdersoftheCompanytobeheldonThursday,March25,2010.

Datedthis dayof 2010.

Nameofshareholder(s)oftheCompany

Signature

Name(s)ofsignatoryinblockcapitals

Pleaseindicatewithan“X”inthespacesbelowhowyouwishyourproxytovoteontheResolutionsreferredto.Ifnoindicationisgiventheproxywillexercisehisorherdiscretionastohowheorshevotesorwhetherheorsheabstainsfromvoting.

FOR AGAINST

Resolution 1ToapprovetheadoptionoftheauditedconsolidatedFinancialStatementsoftheCompanyfortheyearNovember01,2008toOctober31,2009.

Resolution 2ToapprovetheelectionofthefollowingpersonsasaDirectorforthetermhereinaftersetforth:(i)PaulaRajkumarsinghforaperiodoftwoyears.(ii)RichardNesbittforaperiodoftwoyears.(iii)SoniaBaxendaleforaperiodoftwoyears.

Andtore-electthefollowingpersonsasDirectors:(iv)ThomasWoodsforaperiodofthreeyears.(v)JohnD.Orrforaperiodofthreeyears.(vi)DavidRitchforaperiodofthreeyears.

Resolution 3ToapprovetheappointmentoftheAuditors,andtoAuthorisetheDirectorstofixtheirremuneration.

Notes:1.IfitisdesiredtoappointaproxyotherthanthenamedDirectors,thenecessarydeletionmustbemadeandinitialedandthenameinsertedinthespaceprovided.

2.Inthecaseofjointholders,thesignatureofanyholderissufficient,butthenameofalljointholdersshouldbestated.3.IftheappointerisaCorporation,thisformmustbeunderitsCommonSealorunderthenameofanofficeroftheCorporationdulyauthorisedinthisbehalf.

4.Tobevalid,thisformmustbecompletedanddepositedwiththeRegistrar&TransferAgent,FirstCaribbeanInterna-tionalTrustandMerchantBank(Barbados)Limited,FirstFloor,CorporateBankingCentre,Rendezvous,at least48hoursbeforethetimeappointedforholdingtheMeetingoradjournedMeeting.