Perkins
Ashford W. Meikle, Staff Reporter
THE CHIEF executive officer of Pan Caribbean Financial Services (PCFS), Donovan Perkins, says that the expansion of the company's loan portfolio is a critical aspect of PCFS's business growth.
"I think every institution is looking at strategies to grow their loan portfolio, and we would be no different. We have a pretty good portfolio of existing clients that we feel very comfortable with [and] we see growth opportunities there. We expect our loan portfolio to grow again this year," Perkins told The Sunday Gleaner in an interview discussing PCFS's recently-released results for the 2005 financial year which ended December 31.
Indeed, the company saw a 23 per cent increase in interest income from loans which climbed to $520 million, up from the $422 million in 2004. In fact, while total assets experienced a slight decline to $40 billion - with investments falling by six per cent - loans increased by 32 per cent to just over $5 billion.
DECLINE IN INTEREST INCOME
But while there was strong growth in Pan Caribbean's interest income from loans, there was a 19 per cent decline in interest income from securities which fell to $3.9 billion, in contrast to the $4.8 billion posted in 2004. Overall total interest income saw a 16 per cent decline to $4.4 billion, compared to the $5.2 billion earned in 2004.
Explaining the strategy to be employed by the company, Perkins noted, "We've been out calling, trying to get transactions done or trying to determine which companies have expansion plans that require funding."
But while he underscored PCFS's potential, the CEO acknowledged the macroeconomic challenges facing the financial sector.
e economy isn't growing very fast and [so] there are challenges particularly when you have a number of competitors out there."
The CEO told The Sunday Gleaner that he was pleased with the Pan Caribbean's performance which saw a 23 per cent jump in net profit to just over $1 billion.
"I would have to say that I was pretty satisfied with the results that we got. It was a tough market, very competitive but I think we worked well together. I think we have a strong team here and pretty much every body chipped in and lent their support to the results you see there."
He bemoaned the double-digit inflation rate, arguing that it presents one of the biggest challenges to the financial industry. "Rising costs [mean] lower returns on capital - your capital is doing less for you while your costs have been rising pretty quickly."
Explaining that opportunities "present themselves in a myriad of ways," Perkins underscored Pan Caribbean's appetite for mergers and acquisitions, insisting "there are opportunities for further consolidation in the sector."
According to Perkins, "I would say we have a pretty good history of growing organically and inorganically and [mergers and acquisitions] has been part of our business model for the last five or six years so we don't intend to change that. If there are opportunities that present themselves, obviously we will take a look at them."
OPPORTUNITIES OUTSIDE JA
And since opportunities "are less than they have been in the past, the company will look outside Jamaica. There are opportunities - outside the Jamaican market to expand your brand, expand your products and so on. So, if we see opportunities, the plan is for us to take advantage of them, whether they exist here or outside Jamaica."
Commenting on the recent departure of two high-level executives from the PCFS group - COO Anya Schnoor and head of Sigma Unit Trust, Rezworth Burchenson - Perkins was pragmatic.
"It's one of the realities of life. People see opportunities elsewhere and they chose to pursue them. I can understand that. Both of them were pretty good executives here and we miss them, but at the same time we wish them well."
Regarding the highly competitive industry, Perkins noted that while PCFS was aware of other companies, the company had its internal targets to meet.
"We keep an eye on our competition [but] we also have our own internal target which we are trying to hit. So while we operate in a competitive environment and we do measure ourselves in terms of our performance against who we consider to be our peer group, I think there is more pressure on us to hit our internal targets more so than trying to beat someone else."
