BY JULIAN RICHARDSON Assistant Business Co-ordinator email@example.com
CIBC FirstCaribbean International Bank Jamaica (FCIBJ) says a US$70-million ($7.1-billion) capital injection from its parent company will allow it to aggressively expand its footprint on the island and increase market share.
The plan includes strategically adding to the 20 automated banking machines (ABMs) and 13 branches that FCIBJ currently has on the island, according to managing director Nigel Holness.
FCIBJ recently added an ABM on Knutsford Boulevard in New Kingston — its second on the strip — and plans to commission another at the end of September in Negril.
"We have a number of other locations where ABMs will be going over the next couple of months into next year," Holness told the Business Observer yesterday.
"You have to be strategic in terms of where you place your ABMs. Our closest branch to Negril is Savanna-la-Mar," he explained.
Holness said the bank is looking at a number of options in terms of types of ABMs that the bank will be adding going forward, but noted that market research shows that the majority of clients prefer simple cash dispensers.
"It depends on what our platform can accommodate and obviously you have to look at the areas that you are going to go and the type of clientele," he said, adding, "The Jamaican population tend to want to come into a branch to do their lodgements and not want to have a delay if they were to make a cash payment to their ABM."
FCIBJ also has "far advanced" plans to open a branch in a major city in Jamaica, Holness said, while refusing to disclose the exact location.
"There is a strategic plan to increase our footprint, not just in ABMs, but with our branch network. There are areas in Jamaica where we currently do not serve the population, and so those are the areas we will be looking to increase our presence," Holness said.
"We are looking to go into one of the cities in Jamaica and we are looking at sometime in the next fiscal year when we will have that branch open to the public," he added, emphasising that "everything is subject to (regulatory) approval".
FCIBJ's financial year runs to October 31.
Holness stressed that the bank has done an "extensive amount of work already" in the cities that they are targeting to expand their branch network, noting that banks have to go through a "robust process" when looking to add an outlet.
"Branches tend to take seven years before they start to turn profit so you have to be very careful and have a very strategic plan, making sure that you pinpoint the customer base you want to attract — different branches mean different things to different people," he noted.
What's more is that existing locations will be upgraded, he said, noting that the exercise will include "facelifting" the branches and making them more customer friendly. Client experience will be enhanced through new products and system improvements.
"We want to optimise their efficiency and bring more out of them. It's part of the process of offering services to the customer and making sure your brand is always fresh," Holness said.
The FCIBJ managing director added that the capital injection will also allow it to lend more to "certain preferential clients", to whom its ability to lend funds had been limited.
The broad strategy, Holness said, is for FCIBJ to become a "significant force" in the biggest market in Caricom, a goal that was highlighted earlier this week by Rik Parkhill, the CEO of parent company, CIBC FirstCaribbean International Bank (FCIB).
"It is not possible to be a successful bank in the Caribbean without being a major player in the Jamaican economy," Parkhill said in a press release, predicting that "despite current economic challenges, Jamaica will gradually return to higher levels of growth, which will reverberate through the Caribbean."
FCIBJ highlighted in the release that "the bank's total capital ratio of 15.8 per cent as at July 31, 2013 remains well in excess of minimum regulatory requirements, and the injection of the US$70m will further strengthen its capital and position the bank for future growth prospects."
Holness stated yesterday that FCIBJ, with the capital injection and the recent merger of its building society and its banking operations, is now the third largest commercial bank in Jamaica when measured by assets, behind National Commercial Bank (NCB) and Scotia.
According to the BOJ's latest figures, as at June 30, 2013, FCIBJ was fourth with total assets of $48.2 billion, behind NCB ($284.6 billion), Scotia ($232.5 billion) and RBC Royal Bank Jamaica ($53.4 billion).
FCIB has over 100 branches, banking centres and offices in 17 regional markets across the Caribbean and the world.