Ashford W. Meikle, Staff Reporter
Chairman of CCMB, Ryland T. Campbell, addresses the press launch of Capital Advantage Gold and Platinum accounts at the Knutsford Court Hotel on Monday. Mr. Richard Dyche, general manager of CCMB, looks on. - CARLINGTON WILMOT/FREELANCE PHOTOGRAPHER
CAPITAL AND Credit Merchant Bank Limited (CCMB) will be targeting high net worth individuals with its newest products - the Capital Advantage Gold and Platinum Accounts.
Speaking at Monday's launch of the products at the Knutsford Court Hotel in New Kingston, deputy group president and CEO CCMB, Curtis Martin, said that the products are designed for "a relatively up-market ... It targets customers of more substantial means."
Describing the concept as "a market innovation", he declared, "It's something that has never been done before."
Essentially the products are certificate of deposits (CD) instruments but they do bear characteristics of a forward contract. The account holder has the option of collecting the interest upfront (which is normally credited at the end of the contracted period) net of withholding tax while the principal is held until maturity. Customers have the option of investing in Jamaican, U.S. or Canadian dollars or the Pound Sterling or the Euro.
The differences between the products lie in the opening balances and contractual period.
MINIMUM OPENING BALANCE
For example, the minimum opening balance for the Capital Advantage Gold Account is J$500,000 or 10,000 units of the other currencies with contract periods of 90, 180 and 366 days. On the other hand, the Capital Advantage Platinum, with a deposit period of 366 days, has a minimum opening balance of J$5 million or 100,000 units in the other currencies.
While Mr. Martin emphasised that the products would "provide flexibility to customers in terms of cash management," he admitted that they are "designed to drive the banking side of our business," since CCMB would be "locking in long-term funding [and] reduce CCMB's interest rate sensitivity."
According to the executive, lessening the impact of interest rate volatility was important to the bank, which recognised that "net interest margin will be a critical aspect of [CCMB's] business strategy."
'NOT A GIFT'
While the bank is enthusiastic about the prospects of both products, chairman and CEO and group president of CCMB, Ryland Campbell, cautioned that the products are "not a gift. You're expected to let it mature. It's prepayment arrangement where you have you have the benefit of getting this money."
He pointed out that CCMB is "introducing something for which the customer - if he or she is a wise investor - will have the opportunity for having funds that will be available 12 months hence for which to make an investment."
Mr. Martin said the "test marketing has proven to be very exciting ... the initial response has been good."
