NCB looking beyond Caribbean for new frontiers
NCB Financial Group's recent bid for control of Guardian Holdings Limited and majority acquisition of banking outfit Clarien Group do not represent the end of the financial conglomerate's ambitions outside Jamaica.
NCB, which made a record net profit of $19 billion last year, is pursuing a strategy to become not just a regional, but a global banking and insurance powerhouse, its top executive has confirmed.
"The focus right now is on creating a huge pan-Caribbean organisation which can be really successful," said President & CEO of NCB Financial Group, Patrick Hylton in an interview with the Financial Gleaner.
"Once we have properly executed on that, the focus is to go beyond the Caribbean and into other territories. But we want to take it in steps that we are comfortable managing. It could be Central America or wherever the opportunities exist and we feel we have the skills and capabilities to execute," Hylton said.
Already, the banking group provides merchant banking services in Trinidad & Tobago and wealth management and investment services through NCB Capital Markets Limited in Barbados, Trinidad and Tobago, The Cayman Islands.
NCB also has a representative office in the United Kingdom that handles remittance of pensions and gives general banking support to NCB customers in the UK.
In its newly-released annual report for 2017, NCB Financial listed "expansion into priority markets" as its number two priority behind developing its digital capabilities.
The major entry into life and health insurance, through the planned takeover of Guardian Holdings in Trinidad and Tobago, of which NCB already owns 29.99 per cent, appears to be the axis on which the intended regional and global expansion will turn.
Hylton said the Guardian move was made deliberately with the possibilities for expansion in mind.
"The plans for insurance are very simple at this time ... to see how we can work with Guardian to improve its own operation; to see to what extent we can have joint ventures or shared services - different arrangements that can help to improve performance of both institutions; and to see what is the potential for growth and for entering new markets and new businesses for both entities," Hylton said.
Quizzed about what other acquisitions might be on the horizon, he said that none were "on the table right now." And as for the mention of Central America as a prospective market, he said that it was too early to tell how that would pan out.
"I don't have enough insight yet. We have started some preliminary work, but I don't have enough insight to say the next frontier will be Central America. It could be somewhere else," Hylton noted.
Another attempt to list on the New York Stock Exchange is not high on NCB's agenda right now, the group's CEO asserted. An earlier attempt five years ago - in which NCB was reported at the time to be chasing around US$250 million - was abandoned due to unfavourable macroeconomic conditions in Jamaica and investor unwillingness to pay the share price asked by the banking group.
"At the time, we had seen it as an opportunity to bring in some capital. It didn't happen, but we have since that time performed so well that we have been able to generate our own capital to execute on many initiatives," Hylton said.
He explained that the major setback at the time, which was just about the time Jamaica was entering the latest agreement with the International Monetary Fund, was not any issues, related to the company, but the situation facing Jamaica's economy.
"We went to New York. We went on the roadshow. We visited many countries. We saw many investors. We talked to top investors in the world. They were all impressed with the NCB story. They described their view on it this way: fantastic house, bad zip code," Hylton said in summing up the uncertainly of investors at the time.
"Truthfully, we believe we could have still listed because of the level of interest, but the price we would have had to pay would result in too much dilution for the shareholders. we couldn't accept that, so we walked away," he said.