By Al Edwards, Business Co-ordinator
Ho-Shue
THE PROTRACTED acquisition of Issa Trust and Merchant Bank (ITMB) by Derhring Bunting & Golding (DB&G) leads to one question - who would head the merged entity? That person was Tanya Ho-Shue, a banker with some 20 years experience, serving seven of those at ITMB.
She has the unique distinction of spending her entire career at Jamaican banks, beginning at NCB (while there she read for her first degree) then moving on to what was then Manufacturers Merchant Bank where she worked in corporate finance. While there she was recruited by Peter Chin to become Issa Trust & Merchant Bank's Corporate Banking Manager. Continuing on the upward trajectory of her career, today she is DB&G Merchant Bank's General Manager.
During her career as a banker she has witnesses the dramatic evolution of the sector from liberlisation to the establishment of FINSAC, and the bailout of many local banks. What is her overview of the banking sector?
" Over the last decade we have gone through some turbulent times but I can say that today we are a lot more regulatory minded and a lot more vigilant in how we assess credit. This now favours bankers because as most people know, the meltdown of the sector was primarily caused by banks giving loans against assets rather than getting into the credit side or looking at companies cash flows and finding ways to structure the loan through the borrower.
"Today bankers are more in tune with what clients needs are and in terms of assessing credit, they are not so blinkered by assets in the sense of looking first and foremost for security. A more panoramic view is favoured, where by bankers examine the entire business and the people who run those businesses. In short, bankers are now looking at character and management style."
Ms Ho-Shue is of the opinion that back in those heady days too many banks were offering the same type of service and that there was a clear need for differentiation. Recognising this, merchant banks in particular have sought to offer unique products and services and are more aggressively fighting for market share.
Only last week Pan Caribbean Financial Services and Manufacturers Sigma Merchant Bank (where she served for a short stint before that institution merged) announced that they were looking to merge. She sees the recent spate of mergers as inevitable. She points to the fact that many Jamaicans appear more comfortable with the international associated banks but that the local banks are now doing a fine job and will continue to do so.
"I work with DB&G Merchant Bank which you know is an indigenous bank which is very progressive. Its management team is led by bright people who are carefully hand-picked. I don't think the shareholders will allow this business that they have built to falter by the wayside. I am at my best when I work for institutions whom I have confidence in and believe in their integrity-that is a big issue for me. Once I am on board, I am totally committed and dedicated to the task at hand and that's basically who I am.
One of our aim is to make people feel comfortable with doing business with an indigenous bank. Personally I have made it a goal of mine to make people feel safe and secure and let customers know that a sound Jamaican institution has their financial welfare at heart."
"As to financial sector, I have observed that we have become more first world in our thinking but at the same time we have managed to keep within the realms of our own regulations which goes some way in inspiring confidence."
Have bankers become too cautious?
There are those who believe that in the aftermath of the melton down of the financial sector, bankers have become too cautious a case of wearing both belts and braces. As one business man told me, it's easier to pass through an eye of a needle than to get a business loan from a Jamaican banker these days.
"I don't think we have become overly cautious but we all now realise that the regulators are there to guide us and try to encourage us to do things in the right way. I think we should always be mindful of conducting banking within the framework provided by the Minister of Finance and the Bank of Jamaica. If you have training in credit analysis then you should know what to look for and how to assess a business."
\A merger of two business entities is always fraught with difficulties, with displacement of personnel and adjustments having to be made to the new regime. Ms. Ho-Shue notes that the merger though protracted caused little displacement and that the staff is settled and getting on with the business of banking.
" Based on the similarities in cultures and synergies that work well, DB&G and Issa Trust & Merchant Bank has proven a good fit. All but two of the managers have come over. However, three members of staff have since resigned. There is an even split in staff complement between, those from Issa Trust & Merchant Bank and DB&G. It truly is an integration that works well.
GARNERING DEPOSIT
"I intend on growing DB&G Merchant Bank and one of the ways I will be looking to do so is garnering deposits. I am focused on providing new products that will be attractive to the average investor who wants to preserve their capital. I will be paying particular attention to those investors who want to save for a rainy day or build a nest egg for their future. I will also be looking to make capital market type loans as well as accessing the statutory lending agencies that pay attention to development loans. There are many people in Jamaica who are unaware that these agencies like EXIM bank and Development Bank of Jamaica can provide financing for their businesses and I intend on letting people know what is available to them."
She points to a client she visited only last week who is undergoing intensive capital expenditure and is funding it through an over draft and cash flow. In such a case, she says she will be seeking to restructure his entire borrowing scenario by making him spread that capital expenditure over a period of time with payments that he can manage rather than placing undue stress on his cash flow. She will also be actively looking to the statutory lending agencies on behalf of clients like this.
ABOUT TO LAUNCH A NEW PRODUCT
The stock in trade of most merchant banks are certificates of deposits (CDs) and savings accounts. DB&G offers US and Jamaican dollar denominated savings account and an array of new savings products are in the pipeline. The bank is about to launch a new product which is denominated in US dollars and is geared towards foreign investments with clients having to be non-residents.
It has is a tax-free component. Another product that the bank will be offering is a long-term deposit account which will have attractive interest rates and be inflation-linked.
The bank will be launching five new products denominated in both Jamaican and US dollars before the year is out aimed specifically at attracting savvy investors.
