Lavern Clarke, Business Editor
Group Managing Director of NCB Patrick Hylton says he views his competition as all banks with whom Jamaicans do business. - File
National Commercial Bank (NCB) has narrowed the gap with main competitor Bank of Nova Scotia, having snagged more than $10 billion more in loans over a one-year period to June 2007.
That performance signaled a 25 per cent growth in its loan business, but NCB's recorded $51.6 billion portfolio still trailed by $12 billion market leader BNS' $63.6 billion.
Both banks now have near similar capital base, with NCB's improved $17.3 billion almost touching Scotiabank's $17.8 billion - a narrowing of the gap from three billion to half a billion dollars.
"We've never really focused on surpassing Scotiabank," said NCB's group managing director, Patrick Hylton, tackled this week by The Financial Gleaner on when he plans to take pole position.
"Our focus is on improving the value proposition that we offer our customers and business partners."
He defines value as satisfying customers who do business with the bank and ensuring that shareholders and investors get good returns on their investment.
all the big players
Hylton sees his competition not only as Scotiabank but all the big players with whom Jamaicans are doing business.
"We exist in a global system," he said Wednesday. "Our targets are consistent with that reality."
NCB, whose glass encased headquarters sits uptown in New Kingston, has long surpassed BNS in the area of total assets, but Scotiabank which has its main base on the waterfront in downtown Kingston, continues to outperform NCB in deposits and loans.
According to the most recent industry report on commercial banking activity, released this week by the central bank, BNS has $116 billion of deposits, NCB has $106 billion.
But NCB's out-turn reflects deposit growth of 18.5 per cent, compared to only 5.6 per cent of improved savings for BNS.
But the latter bank whose network is the largest of the six commercial banks in Jamaica, has outperformed BNS in loan growth - 25 per cent to Scotiabank's 11.65 per cent, cutting the portfolio gap between the two from a nominal $15 billion to more than $12 billion, in the process.
Loan market grew
The loan market itself grew overall by an average of 23.6 per cent to $170 billion, dragged down by Scotiabank which had the most sluggish growth of all the banks within the review year.
Citibank led the way by doubling its portfolio from $770 million to $1.5 billion, while both FirstCaribbean and FirstGlobal improved their markets by more than 40 per cent, while RBTT Bank's growth, pushed up by its loan sales, was 34 per cent.
All but one of Jamaica's commercial banks have foreign ownership - FirstGlobal is owned by the GraceKennedy group. NCB is owned 76 per cent by Jamaican/ Canadian Michael Lee Chin, and could claim local ownership, but Lee Chin's shareholder returns are remitted to parent AIC Barbados Limited and then sent on to Canada, AIC's home base.
Royal Bank of Canada is about to re-enter Jamaica - having sold out its interests here sometime in the 1980s - as the new owner of No. 3 bank RBTT.
For Hylton, global is increasingly local.
Asked about the expected rivalry from RBC, which has already signaled that it sees growth prospects in Jamaica and Trinidad, the NCB boss said that while the Canadian Bank was heavily capitalised - C$22 billion of equity according to its last audited accounts - there are other players in the market with similar strength.
"Customers in Jamaica have access to overseas companies, so in a sense we are already competing," said Hylton.
Jamaica's commercial bank market is now valued on total assets at $462 billion, with NCB commanding $176 billion and BNS $156 billion. Loans represent 37 per cent of assets, while its ratio of deposits, which totals $292.7 billion, to total assets is 63 per cent.
lavern.clarke@gleanerjm.com
