By McPherse Thompson, Staff Reporter
Christopher Lowe and Earl Jarrett
CUSTOMERS of National Commercial Bank (NCB) will now be able to access a range of home mortgages, signalling the re-entry of the privatised bank into the provision of financing for the residential market.
Christopher Lowe, NCB's chairman, in making the announcement on Wednesday, also said the bank has concluded negotiations to acquire the minority shareholdings in its securities trading and advisory investment arm, Edward Gayle & Company. NCB previously held just over 50 per cent of the shares, while Jamaica National Building Society (JNBS) and the state-owned Financial Sector Adjustment Company (FINSAC) held the others.
"This is an agreement that has been reached after quite some time and is allowing NCB to begin to realise its aspirations and dreams for an investment bank," Mr. Lowe said.
Speaking at a press briefing at the bank's Trafalgar Road, New Kingston headquarters, Mr. Lowe said it would have been somewhat of a detraction from the bank's services if it did not have a home mortgage product and therefore it has formed an alliance with JNBS to underwrite the residential loans.
Courtney Campbell, NCB's head of retail banking, said the bank would be offering mortgages of up to 80 per cent of the value or purchase price for residential dwellings, home improvement, residential land acquisition and refinancing. The loans will be available to qualified customers of NCB, that is, those who have maintained an account with the bank for a minimum of three years, with a minimum balance of $100,000 for at least three months before making an application.
NCB will offer up to a maximum of 65 percentage financing at interest rate of 15 per cent, and up to 80 per cent at interest rate of 16 per cent for acquisition of residential dwellings and land, as well as home improvement. For refinancing a mortgage, the bank will lend up to 80 per cent of financing at interest rate of 17 per cent. However, refinancing will not be applicable to existing JNBS mortgages.
Earl Jarrett, general manager of JNBS, who also attended the press briefing, said the new product would be NCB-branded and was therefore different from those being offered by the building society.
JNBS's lowest mortgage interest rate is currently at 14 per cent for first time home buyers, but NCB's Campbell argued that at that rate, the building society was catering to a niche which the bank would not be targeting.
In a fact sheet circulated at the briefing, NCB, as part of the effort to attract customers, said its mortgage product would offer special benefits to customers through its Mortgage Plus. Among those benefits will be gift certificates valued at up to $20,000 and redeemable at Courts (Jamaica), Hardware & Lumber True Value and other participating merchants; financing for closing costs; closed bridge financing; automatic approval of NCB International Credit Card, and free standing orders for mortgage payments.
With respect to the acquisition of the minority shareholdings in Edward Gayle & Company of which NCB previously owned 50.5 per cent, Mr. Lowe said the bank has paid $167 million to purchase the remaining 49.5 per cent. JNBS had owned 25 per cent of Edward Gayle & Company, while Mutual Life/FINSAC owned 24.5 per cent.
According to information also released, for the last financial year ended September 30, 2001, Edward Gayle & Company, the island's largest stockbroker, had a net asset value of $246.2 million, while its profit before tax came in at $76.1 million.
