TEN years ago, if one had said that NCB would by the end of the decade become Jamaica’s top-performing bank, one would have been considered to be absolutely barmy. When the chairman and CEO of Canadian mutual fund powerhouse AIC Michael Lee Chin bought a 75 per cent stake in the ailing bank in 2002 for US$127 million (J$6 billion) and declared that one day the very same bank that would not employ his father would be the country’s leading banking entity, many would have put his declaration down to braggadocio. It would be impossible to fathom any bank surpassing the mighty Bank of Nova Scotia (BNS), which for decades stamped its mark on Jamaica.

Last year was a watershed year for NCB, one that saw it overtake BNS as the country’s most profitable bank. Lee Chin was proven correct, but it was the acumen and management ability of NCB’s managing director Patrick Hylton that made it possible.

Incidentally, Hylton began his banking career at BNS. The years 2009 and 2010 were testing ones for all the financial institutions in Jamaica. The global recession continued to bite and the local economy contracted and, of course, operating costs continued to escalate. Also, the Jamaica Debt Exchange (JDX) significantly reduced earnings from the major revenue stream: government paper. Despite these challenges and obstacles for the financial year ended September 2010, NCB posted a net profit of J$11.07 billion, an increase of J$827 million or 8.1 per cent. Operating revenue came in at J$29.31 billion, increasing by 8.0 per cent or J$2.17 billion. Total assets increased by 6.3 per cent over 2009’s figure and came in at J$334.97 billion. Of note here is the increase of customer deposits, which at J$144.28 billion were 10.7 per cent higher than the figure posted in the previous year. The risk-based capital adequacy ratio improved to 16.5 per cent from 14.6 per cent. Earnings per stock unit of J$4.50 grew by J$0.34 or 8.1 per cent. Investment securities of J$200.13 billion increased by J$32.41 billion or by 19.3 per cent.

All the more remarkable was the performance of its wealth and asset management arm, NCB Capital Markets, headed by Dennis Cohen, which contributed J$3.55 billion to the Group’s operating profits, a 55.2 per cent increase on 2009’s numbers. The Group attributes this J$1.3 billion rise in profits to firstly an increase in net interest income resulting from lower cost of funds and secondly non-recurrence of mark to market losses from trading activities undertaken in the prior year.

For the first quarter ended December 2010, NCB has already posted a net profit of J$3.01 billion with operating revenue increasing by 13 per cent. Net loans jumped to J$88.56 billion. Retail, Corporate and Treasury reported combined operating results of J$2.41 billion, an increase of J$91 million over the prior year. Today NCB remains the largest commercial bank when measured by profit, assets, branch network and capital base.

The more cynical among us may well say that NCB’s performance was characterised by an increase in fees and charges to make up for the infliction of the JDX, but that would be overly simplistic because that circumstance was not exclusive to NCB alone. Furthermore, it doesn’t fully account for the manner in which the Group was able to overhaul its strategy and reposition itself.

Hylton’s chairman, Michael Lee Chin, gives some perspective here. Speaking with Caribbean Business Report from Canada, he said: “Patrick Hylton is exceptionally technically gifted. He has the ability to see around corners. He anticipated that the economy would slow down and that our loan business would fall off, so what does he do? He endeavours to strengthen our collection processes as to minimise loan losses. He made this move well in advance of our competitors.”

Hylton is an extremely intelligent man who is the epitome of equanimity. Over a decade ago he had the daunting task of repositioning the country’s financial sector after the meltdown of the 90s. As the head of Finsac, he is generally acknowledged as doing a fine job in executing his duties fairly and impartially. Today, many of those institutions and indeed some of the personalities of those trying times have rebounded due in the main to Hylton’s management of Finsac. This feat was a precursor to what was to come. He joined NCB in 2002 as Deputy Managing Director, and in 2004 took over the top job from Aubyn Hill and has quietly but assiduously gone about positioning NCB as the most profitable institution in Jamaica in less than a decade.

Hylton has cultivated a team of highly talented and respected professionals — all Jamaicans — heading the largest indigenous financial institution in the country. His trusted and gifted Deputy Managing Director, the ex-Citibank executive Dennis Cohen; the doyenne of corporate banking, Marjorie Seeberan; Ann Marie Hamilton, who is doing a fantastic job with the Group’s insurance arm; Bob Blake in Treasury; Bernadette Barrow, who has taken Small and Medium Enterprises to another level; Howard Gordon in IT systems; and Sheree Martin, who has done a wonderful job with marketing and communications.

“He (Hylton) has the respect of the entire staff and has been able to congeal them as opposed to acting as a polarising agent. He has managed to get the senior management team to work harmoniously and has created a great fit. The entire staff now has a pep in their step because they can see that NCB is helping to build a better Jamaica,” said Lee Chin of Hylton’s management style.

For so long NCB’s retail banking arm was in the doldrums, making losses and taking a drubbing at the hands of BNS. Hylton was able to turn it around and make it a profit centre. When Courtney Campbell left, it was a blow and observers wondered whether he could ever be ably replaced. Hylton did just that, moving swiftly to bring Audrey Tugwell Henry in from BNS. He also managed to turn around NCB insurance, with much of the credit going to Ann Marie Hamilton. NCB Capital Markets took a severe hit from the Lehman Brothers debacle but Hylton managed to gee up his mercurial head of NCB Capital Markets at the time, Christopher Williams, and stage a fightback. Today, under Dennis Cohen’s guidance, NCB Capital Markets is the best wealth management outfit in the country. But that’s all banking — dollars and cents. Hylton’s achievements have gone beyond just financial concerns. The NCB Foundation, headed by Thalia Lyn, is now one of the best philanthropic enterprises in the country and has made exceptional strides in the fields of education and community service. Last year, NCB won the Human Resource Management Association of Jamaica’s (HRMAJ) Golden Leader in HR Innovation Award NCB was also recognised by United Way of Jamaica as the “largest single local corporate contributor to the voluntary organisation”. At the end of last year NCB won five of eight possible awards at the Jamaica Stock Exchange’s (JSE) Sixth Best Practices Awards Banquet. The bank walked away with awards for Annual Report, Corporate Disclosure and Investor Relations, Website Stockbrokerage, PSOJ/JSE Award for Corporate Governance and the coveted Governor General’s Award for Excellence. Under Hylton’s tenure, NCB was selected as Employer of Choice in 2009 by the Jamaica Employers’ Federation and placed first with Employee Satisfaction.

NCB has also been acknowledged by prestigious international publications. For the second consecutive year, NCB was awarded the “2009 Bank of the Year in Jamaica” by the Financial Times Banker Magazine. Last year World Finance voted NCB Best Banking Group, Jamaica, and Most Innovative Bank.

Speaking about his former boss, CEO of Proven Investments Christopher Williams said on Wednesday night, “Patrick Hylton is a silent giant. His management style is to give you an opportunity to deliver. To the extent that you deliver, you won’t have any issues with him. But should you fail and not succeed, you will feel his wrath. He does not accept failure.

“He gives you the space to drive the implementation of your strategy. His reporting methodology is very structured. He expects you to deliver on time and be accurate. He emphasises that as money managers responsible for and with people’s money it is imperative that you get it right all the time.

“Patrick Hylton is very humane and cares about the well-being of the entire staff, not just senior managers. He is never disrespectful and has a very good motivational style. It was a pleasure working with him and I learned much about management from him.”

Chairman of NCB Michael Lee Chin, a keen observer of leadership traits, is fulsome in his praise and acknowledgment of his managing director. He regards what has transpired at the bank as a case study in how one turns around a financial institution.

“Patrick (Hylton) lives by a simple mantra: Success requires no explanation. In other words, when you are not successful that’s when you have to explain why that is so. He doesn’t absolve negatives. He has no time for negativity. He is extremely disciplined, hard-working and fiercely competitive. He is gracious, leads by example and is loved by all. I can tell you that he is a humble man, quiet yet strong, in fact, he is an admirable human being. Overreaching all of these qualities is the fact that he is intellectually honest. He is instrumental in making NCB the most profitable company in Jamaica and, by extension, the biggest taxpayer to the government, which means that the bank is playing its part in building a better Jamaica. What a fantastic choice as Caribbean Business Report’s Personality of the Year for 2010.”