- Rudolph Brown/Staff Photographer
Chairman Michael Lee-Chin, left, confers with Managing Director Aubyn Hill, at the recent annual general meeting of National Commercial Bank.
Andrew Green, Staff Reporter
MICHAEL LEE-CHIN, chairman of National Commercial Bank (NCB), says the institution is making changes at some of the companies in which it has recently invested, while at the same time carrying out an internal transformation.
Since its acquisition by Mr. Lee-Chin's AIC (Barbados) Limited in March 2002, profitability at NCB improved substantially, and the institution has embarked on an aggressive acquisition drive.
"The only way to create wealth is to reinvest," Mr. Lee-Chin said on Thursday. He was speaking at the NCB annual general meeting (AGM) at the Jamaica Pegasus Hotel.
The bank he took over in 2002 included NCB (Investments) Ltd., OMNI Insurance Services Ltd., Edward Gayle and Co. Ltd., West Indies Trust Co. Ltd., Data Cap Processing Ltd., NCB Jamaica (Nominees) Ltd., and NCB Cayman Ltd. as its subsidiaries. Among other changes, OMNI has subsequently been renamed NCB Insurance Co. Ltd. and Edward Gayle & Co is now NCB Capital Markets. The financial group has also acquired holdings in Cable & Wireless, Life of Jamaica, RJR, Dyoll, Kingston Wharves and Red Stripe since the start of 2003, the chairman acknowledged.
These investments are intended to be held over the long term, Mr. Lee-Chin said. "I have an allergic reaction to selling."
KWL ACQUISITION
It has acquired 466,090,902 ordinary shares, which represents just under 44 per cent of the share capital in Kingston Wharves Ltd (KWL), from Grace, Kennedy & Co. Ltd. on January 21, 2004.
A statement from NCB said the purpose of the KWL acquisition is for equity investment and that it did not intend to purchase further equity in the company at this time, nor did it not intend to acquire control of the business or majority shareholding of the company.
Asked at the AGM whether NCB would be installing its own directors at KWL, Mr. Lee-Chin said, "We did."
The Jamaica Stock Exchange noted that Robert Almeida, Peter Lawson, Joseph Sferrazza and Stephen Lyn Kee Chow had been appointed to the KWL board, effective February 23, 2004. This follows the resignation of Douglas Orane, Philip Alexander, Gordon Shirley, Donald Wehby and Robert Kinlocke.
"Not at this time," Mr. Lee-Chin said, when asked whether there would be any changes to the board of RJR as a result of NCB's acquisition of a 10 per cent stake in the company during January. He said, "We are a passive shareholder."
DYOLL ACQUISITION
In mid-February, NCB acquired a 44 per cent stake in Dyoll Group. It repeated its declaration that its stake was an equity investment and there was no intention 'at this time' to increase its holding or acquire control of Dyoll.
Dr. Michael Witter, N. Patrick McDonald and Gordon Sharp resigned from the Dyoll board with effect from January 27, following the resignation of Paul Bicknell on December 31.After a Dyoll board meeting on January 28, Dr. Michael Witter, N. Patrick McDonald and Gordon Sharp, were appointed as directors to stand until the next AGM. The investments at Cable & Wireless and Red Stripe were, "relatively minor," Mr. Lee-Chin said, consisting of holdings of less than 10 per cent of the shares in those companies.
But NCB is, "not just about money," Mr. Lee-Chin said. "It is about making a difference in the lives of the people in our community. To make that difference, we need to be profitable."
Net profit for the Group for the quarter ended December 31, 2003, was $746 million, a 55 per cent improvement over the $481 million for the corresponding quarter in the previous year, NCB Managing Director Aubyn Hill, at the AGM. This performance was mainly attributable to a $1.4 billion increase in net interest income, up 117 per cent when compared to the corresponding quarter in the previous year.
"The Bank's main businesses are growing well," Mr. Hill said. "NCB is a strong, diversified financial group."
A major challenge is its cost to income ratio which, "continues to be too high," Mr. Hill said. That ratio fell from 78.6 per cent at the end of December 2002 to 68.4 per cent at the end of December 2003. Two years ago, the ratio was above 90 per cent. Mr. Hill said two years hence, it was expected to be below 50 per cent.
"While we continue to focus on cutting our costs," Mr. Hill said, "we are also growing our revenues."
