Cayman Islands Financial Services

Butterfield Bank has announced the record income for the Group for the full year ended on December 31, 2006. So, in 2006, its net income was $134.1 million.

The above-mentioned figure was up 22.6% year on year, and bank’s shareholders will reap the benefits in March.

Butterfield Bank (Cayman) Limited made an impressive contribution to the Group’s performance reaching a record net income of $53.4 million, up 16.5%year on year ($7.6 million).

In accordance with Butterfield Bank, the successful performance reflected strong growth in revenues from banking services and investment and pension fund administration.

The total assets of Butterfield Bank (Cayman) Limited were up 8.3% year on year, while client assets under administration were 26.8% up. Assets under management on December 31, 2006 were $1.1 billion, which was in line with December 31, 2005. These financial results are reflecting the balance and soundness of the bank’s business model. Conor O’Dea, Managing Director of Butterfield Bank (Cayman) Limited, said that the Cayman operations have played a significant role in the success of the group and that “being awarded the Bank of the Year for the third time in five years is evidence of the strength and reputation of the Bank in Cayman”.

As to the overall diluted earnings per share for the Group, these were $4.60, up 19.5% as compared with 2005.

2006 also saw other records for the bank. They included an increase on net interest of 18.1%, on a non-interest income of $193.7 million and on total assets of 21%.

Alan Thompson, President & Chief Executive Officer expressed the satisfaction regarding “the strong growth in our financial performances across the Group in a challenging and competitive environment.

On January 26, 2007, the SciVest Group of Companies has announced the launch of SciVest Global Net Short Equity Fund based in the Cayman Islands.

SciVest is a leading quantitative global investment manager specializing in developing unique and innovative hedge fund portfolios. It has managed to create an offshore version of its top-performing Canadian-based SciVest Net Short Equity Fund. It Offshore Fund is the sister fund to the Onshore Fund launched in July 2004, which has consistently been regarded as one of the top-performing equity short biased funds all over the world.

The investment objective of the Cayman-based SciVest Global Net Short Equity Fund is providing investors with a strong and predictable hedge to the global equity markets to generate competitive returns.

In 2003, SciVest was awarded the Top Performing Emerging and Mid-Stage Equity Market Neutral Fund in 2004, SciVest the world at the Global Alternative Investment Management Forum in Switzerland. It also won the Canadian Investment Award for the Best Relative Value Hedge Fund. SciVest Net Short Equity Fund was ranked the Top Performing Equity Short Biased Hedge Fund globally for the months of April, September and October by the Barclay Trading Group, Ltd. in 2006.

Statistical data of the National Assessment of Living Conditions (NALC) will serve as a base for updating the consumer price index in the Cayman Islands, which is 15 years out of date. In the beginning of February, attendees at 2007’s 1st Chamber of Commerce Luncheon at the Wharf Restaurant came to this decision.

The NALC is initiated by the Cayman Islands Government, while the cost of the consultants is funded by the Caribbean Development Bank (CDB). Its main aim is to evaluate the current conditions affecting the welfare of people as well as to identify policies, action plans and strategies reducing economic deprivation and improve the quality of life in the Cayman Islands.

The NALC is the most important initiative to psycho-social infrastructure ever undertaken in Cayman.

The consumer price index will be based on macroeconomic data generated from the survey and statistical data that can allow Cayman to partly catch up with regional standards.

The training of 51 enumerators for the survey has already been completed. Some of the enumerators are experienced people who have previously worked with the Economics & Statistics office, but some are new employees.

The results of the study will be made available to the public. They are planned to be applied across government and statutory entities, and policy recommendations will be made based on analysis of the data.

Some of the costs of the project were covered by sponsors. To date, offsetting NALC’s costs, Caribbean Utilities has given USD 4 000 and Royal Bank of Canada has given USD 2 000.

Within the financial industry in Miami, experts from the Cayman Islands will focus on financial crime and due diligence working together with other offshore and onshore financial centres.

On April 24-25, 2007, at the 5th Offshore Alert Financial Due Diligence Conference, Chairman of the Cayman Islands Monetary Authority (CIMA) Timothy Ridley, Deloitte (Cayman) partner Stuart Sybersma, and Bodden Corporate Services compliance officer Nancy Saur will join respectable speakers from other offshore jurisdictions and the USA.

Timothy Ridley will be a panelist on 2 sessions. One of them is “US Senate vs. Offshore Financial Centers” panel aimed at analyzing the findings of an investigation by the US Senate’s Permanent Subcommittee on Investigations dealing with offshore structures set up by wealthy Americans in the Cayman Islands and in other jurisdictions in order to outwit US securities, money laundering and tax laws.

The participation of 2 US attorneys who helped negotiate a USD 67.5 million litigation settlement with the Bank of Bermuda (Cayman) following the collapse of one of the biggest Ponzi schemes in history known as “Cash 4 Titles” is particularly related to Cayman.

The conference organizers consider that one of the main reason why people will want to attend the vent is learning how to avoid problem clients. The conference is to inform attendees about on financial crime and help them reduce risk in becoming involved in incidents that may damage their reputation and financial position.

The conference will provide the opportunity to speak up for over 40 speakers from the Cayman Islands, the British Virgin Islands, the Bahamas, Bermuda, Barbados, Canada, St Kitts & Nevis, the UK and the USA, representing the public and private sectors.

On the onshore regulatory side will be represented by speakers from the US Securities and Exchange Commission, the US Department of Justice, the US Department of Homeland Security, and US Senate, while offshore regulatory speakers will be represented by CIMA, the British Virgin Islands Financial Services Commission and the Securities Commission of the Bahamas.

Following final consultation with the financial industry representatives, on January 8, 2007, the Jersey Financial Services Commission introduced its listed Fund Guide.

As a result of the introducing the Fund Guide, the representative of the Jersey Funds Association, Graeme McArthur, announced that Jersey could become a more attractive domicile for some particular funds and investments structures.

Jersey has approved an amendment to the island’s income tax law. The amendment ensures that Jersey’s companies are treated as non-resident for tax purposes if particular conditions are completed.

What is interesting enough for the financial services industry of the Cayman Islands is what Graeme McArthur said. According to him, the income tax amendment will enable Jersey’s funds industry “to compete directly with jurisdictions such as the Cayman Islands, which in the past has invariably been the chosen domicile when a structure requires a non-UK incorporated but tax resident company.” It goes without saying that the above-mentioned stresses the importance of the Cayman Islands in the offshore world.

A banking representation office of Cayman National Corporation (CNC) will be set up a in Panama City.

Last week, at a press conference, Kim Remizowski, CNC’s Manager Business Development North America, explained that the new office will be the platform for contacting existing Cayman National Latin American clients as well as will provide business opportunities in new markets in the regional a minimal cost.

According to Mr. Remizowski, Panama’s mature banking industry was one of factors that made it an easy decision for CNC to establish its banking representation there. So, the office in Panama City will support businesses in Cayman by means of detecting new suppliers and facilitating trade between the 2 countries through banking and financial mechanisms.

It is worth noting that Panama is a thriving offshore financial sector serving over 370 000 registered companies there, which also already has more than 85 banks from 35 countries.

One of the factors that determined the establishment of the representative office is that Panama has taken significant steps to combat money laundering and terrorist financing. In accordance with Mr. Remizowski, “Panama’s new comprehensive banking law meets the standards of leading financial centres in the world”, cooperating with such jurisdictions as the Cayman Islands.

To facilitate the opening of the new office, CNC has moved one of its Cayman-based employees Carlos Guzman with his family to Panama.

An official opening of the new office will be held on March 6-10, when CNC employees will be attending the second Chamber of Commerce Cayman Panama Trade Mission.

On January 18, 2007, academics and business people gathered on The Ritz-Carlton for one of the most important annual conferences in the Cayman Islands - Cayman Business Outlook.

The theme of Cayman Business Outlook 2007 - which is the 4th conference - attracted noted futurists and senior government officials from overseas. It was “Future Trends: the next 5 years”. Abound 250 people have come to the 1-day event.

The conference has been founded and organised by Fidelity and sponsored by PricewaterhouseCoopers, Consolidated Water, Digicel, RoyalStar Assurance, Admiral Administration, Five Continents Financial, Campbells, Dart Management, the Ritz–Carlton Grand Cayman and the Cayman Island Investment Bureau.

The speakers were Brett Hill of Fidelity; Noel Reilly of PricewaterhouseCoopers; J.D. Buckley of Digicel; Scott Elphinstone of Five Continents Financial; Dax Basdeo of the Cayman Islands Investment Bureau; Canover Watson of Admiral Administration, and many others.

The Hon. Kurt Tibbetts, Leader of Government Business, was among the featured speakers at the 4th annual Cayman Business Outlook conference. In his speech, he emphasized the link between business and the government in the Cayman Islands. According to him, “Cayman’s close proximity to the US; supportive, business-friendly legal framework; and stable political and economic environment have been all necessary ingredients for Cayman growth into a major international financial services centre”. The Leader of Government Business also mentioned latest statistics for 2006 from the Cayman Islands Monetary Authority, which shows solid growth in banking, insurance and fiduciary services.

The conference provided a glimpse of the Cayman future by means of discussing various topics ranging from how the US has positioned itself as the world’s government in the 21st century to regional immigration trends and the impact on business – so, the business climate both in and for the Cayman Islands was discussed. It goes without saying that retaining competitiveness means that Cayman businesses need to be informed on future trends and the global forces that might influence them, therefore the conference was a valuable source of information regarding this.