Ashford W. Meikle, Business Reporter
Senior vice-president for Wealth Management and Investment at Scotiabank, Anya Schnoor. Norman Grindley/Deputy Chief Photographer
DB&G to retain its personality, - DB&G to retain its personality, remain a listed company - Schnoor
nxious to allay concerns that there could be problems in melding corporate cultures and a dilution of Dehring, Bunting & Golding's reputation for individualised customer service, Bank of Nova Scotia says there will be no attempt at watering down DB&G's distinct personality once it acquires the investment bank.
In fact, not only does BNS point to the fact that it will keep DB&G public, but is keen to highlight the plan to keep onboard for at least two years the key players who have shaped the character of the investment bank.
"We intend to keep it as a listed company on the stock exchange," said Anya Schnoor, senior vice-president for wealth management and investment at Scotiabank Jamaica. "That's our long-term objective."
"The existing management of Mark Golding, Peter Bunting and Gary Sinclair will stay on board for two years and see us through the transition," Schnoor added.
Wants 75-80 per cent
BNS has said it wants to buy 75-80 per cent of the investment bank, but under stock exchange rules for takeovers and mergers - rule 19 - the commercial bank will have to make offers to all shareholders for a full takeover.
It is up to shareholders whether to accept the offer.
Bunting, DB&G's executive chairman and Mark Golding were, with Christopher Dehring, the young founders of what was then an upstart merchant bank during the early 1990s, a heady period when almost anyone appeared keen to set up a financial company.
Bunting had previously worked at Citibank and the National Investment Bank of Jamaica while, Dehring, also a 'graduate' of the Citibank system, had been managing director of Delroy Lindsay's now defunct Corporate Merchant Bank. Golding was a young corporate lawyer. At the time when Dehring sold most of his holdings and left the bank early in this decade to joint the West Indies Cricket Board as head of its marketing operations, Sinclair acquired a big stake.
Like BNS - Jamaica's largest commercial bank with assets at the end of last financial year of $183.4 and profit last year of $5.9 billion - DB&G survived the late 1990s meltdown of Jamaica's financial sector, when several banks and insurance companies went bust. More than survive, both banks prospered.
Yet, either brought inherently different cultures to the process. Cautious and conservative, BNS, which has operated in Jamaica for more than a 100 years, has grown organically, trading on a trusted name when Jamaicans had grown wary of indigenous banks.
quick route to growth
On the other hand DB&G diversified aggressively and saw mergers and acquisitions as a quick route to growth. It picked up a number of the smaller institutions that faltered in the late 1990s.
By the time BNS formally announced its offer last week of $21.08 a share for between 75 and 80 per cent of the company, DB&G had assets of $30.5 billion and reported profit of $882 million at the end of its 2005 financial year. Its market capitalisation was $6.4 billion.
Moreover, it operated in a segment of the market that BNS, which recently has been attempting to shed its stuffy, staid image wanted to get into - evidenced by some
of the statements and actions of its bosses.
The first signal of this direction came at BNS' annual general meeting earlier this year when its managing director, Bill Clarke, who, previously, had consistently defended his bank's inclination to stick close to core operations, hinted at a new focus.
"Wealth management will be a major focus for Scotiabank in the coming years," he said. "... There are some players in the market who believe that we may have surrendered the investment market to them and we might have done so unwittingly."
Then Clarke wooed Schnoor from PanCaribbean Merchant Bank where she was chief operating officer and has been among the architects of its recent rapid growth through mergers and acquisitions. Schnoor was to head up BNS' foray in the investment market.
Schnoor is clear that she can't deliver DB&G as a mini Scotiabank.
"They are two totally different entities," she told the Financial Gleaner. "DB&G customers are used to a certain level of service and that is not going to change. We don't have any plans to take the DB&G branches and put them in a Scotiabank.
"(Customers) don't have to worry that all of a sudden they will have to get in line at a BNS branch to cash a Repo."
Among the business segments and income streams that DB&G will bring to Scotiabank is stockbroking and unit trusts operations, which Schnoor admitted were factors in the decision to offer for the investment bank.
More attractive option
"One of the decisions we had to make was whether we would try and get a licence from the Jamaica Stock Exchange or try and get a unit trust licence and build organically, or look around for companies that would be a good fit and had the products that would help us to grow," she said.
Obviously, the latter option proved the more attractive, helped no doubt by a customer base of 23,000.
"We had spoken to them (DB&G management and major shareholders) and they had indicated that if the offer was something good they would look at it and we started discussions with them," Schnoor explained. "When you look at business world-wide [wealth management] is complimentary to the range of services and we are sticking to what we know best - managing money."
Independent analysts, too, agree that it is a potentially good fit.
"It's something that BNS knew that they needed to offer to their clients in terms of innovative products and DB&G is known for these," said Doyl Smith a research analyst at the money management firm, Jamaica Money Market Brokers (JMMB). "If you are not offering your clients more, they will go elsewhere for it."
ashford.meikle@glenaerjm.com
