Ashford W. Meikle, Staff Reporter
NCB Atrium, on Trafalgar Road in St. Andrew - CARLINGTON WILMOT/FREELANCE PHOTOGRAPHER
THE NATIONAL Commercial Bank Jamaica Limited (NCB) plans to aggressively grow its loan portfolio with the recent US$30 million loan it received from the International Finance Corporation (IFC).
"We still have the capacity to make more loans and we will continue the loan growth process. I think that significant development has taken place in the loan portfolio. We have grown on the Jamaican dollar side, we've grown on the US dollar side - perhaps more dramatically on the US dollar side," said group managing director of NCB, Patrick Hylton at last week's signing of the credit facility. He was responding to queries about the potential target of NCB's loan portfolio.
However, the executive emphasised that while the bank aims to build its portfolio it would be discriminatory in the loans booked. "One of the things we're very careful about [in booking loans] is ensuring that we are putting out quality assets. So that is always, in a sense, a constraining factor," he reflected.
Up to March this year, NCB had approximately $38.4 billion in loans on its books or about 30 per cent of the loans and advances in the retail banking sector. It's competitor, Scotiabank, controlled about 44 per cent of total loans with its$51 billion portfolio.
But, while he has expressed NCB's desire to grow its portfolio, Mr. Hylton has been vague as to the bank's plans, particularly as it relates to the IFC loan. "There are a number of projects that we have ... on the horizon which we think this type of funding -- the long term nature and the structuring of it - would be ideally suited," he told reporters at the press conference.
Without being specific he explained that, "There are no general restrictions regarding the types of projects. There would be restrictions in terms of engaging in certain types of activities, which would be outside the mandate of the IFC and ... outside of even our mandate. We would not be engaged in financing activities of a certain nature. ...It can be used to fund normal commercial activities."
The funds, which will add to NCB's pool of existing pool of funds, is available en bloc and will be maintained in US dollars. Still, Mr. Hylton has said that the facility will offer the bank "greater flexibility in terms of options that we might have for the utilisation of those proceeds particularly having regard to the long term nature of the facility."
But, outside of the fact that it is a long term, unsecured amortised loan, the bank has offered very little details about the terms of the loan.
For example, left unanswered, is the bank's cost of funds, it's hedging strategy, terms of the moratorium on the interest payments and other details similar to facilities of this nature. The deputy chairman of NCB, Kris Astaphan, defended the bank's decision, noting, "These are competitive items, which we will not disclose to our competitors. It's a market loan, long term, unsecured. There is nothing unusual about it."
Added Mr. Hylton, "We believe that based on the tenure and what exists in the market today that it is competitive."
