Investors expressed their displeasure with NCB Financial Group Limited’s (NCBFG) decision to skip another dividend payment, shedding the company’s shares in early morning trading Thursday, pushing the stock price traded down to $52, despite the financial conglomerate raking in $7.39 billion in consolidated net profit for its third quarter up to June 30.

There were 98 trades at market open valued at $10.64 million Thursday on the Jamaica Stock Exchange (JSE) as NCBFG’s stock price traded down from $74.16 to $52. However, a trade for 3,061 shares at $52 and another trade for 10,000 shares at $52.01 were cancelled by the JSE’s market control as the prices would fall out of the trading band for the new reference price of the stock. As a result, $55 became the new 52-week low for NCBFG, a price not seen in seven years with 145,697 shares traded at the market open with a $73 high. However, the stock closed the day at $69.88 as Mayberry Jamaican Equities Limited purchased 3 million shares at $70 as confirmed by its Executive Chairman Christopher Berry in a tweet.

When asked about his response to the early market reaction, executive chairman and majority shareholder Michael Lee-Chin referenced the number of shares that traded relative to the 2.47 billion shares outstanding and that the trades would have happened before the 10:00 am investor briefing. Lee-Chin’s Portland Holding-related entities have various debt maturities coming up, with several of these debts secured by NCBFG shares. The Jamaican-Canadian billionaire has sold numerous assets over the last year with his AIC (Barbados) Limited selling 38.71 million NCBFG shares in June worth more than $2.6 billion. The NCB Towers on Oxford Road, New Kingston, is the latest AIC related asset that has been put up for sale.

“When you look at trading in the marketplace, you have to look at the amount of shares traded versus the totality of the amount of shares outstanding. There is no collateral risk. We have had notes outstanding using NCBFG shares as collateral since 2004. We went through the global economic crisis, we’re fine. We went through the crisis in 2013 when we negotiated with the IMF [International Monetary Fund] and we went through the pandemic. We have been paying down debt. At $75, our collateral coverage is a lot more than $64,” Lee-Chin responded at the media briefing held on Thursday.

NCBFG’s consolidated net profit for the nine months is down 47 per cent to $13.73 billion, with total assets and equity attributable to shareholders climbing to new records of $2.22 trillion and $183.94 billion. While its Jamaican peers have continued dividend payments, NCBFG has been focused on bolstering its capital base, especially at the NCBJ level, as they get ready for Basel III and rising interest rates.

“Rising interest rates has impacted all entities across the group, including the holding company in servicing its debt. So we have seen rising interest costs right across the board impacting all entities. We have indicated at a prior investor briefing that we are positioning ourselves to get ready for the Basel III implementation; therefore, we’re ensuring we conserve capital to meet those ratios. We’ll have higher capital standards, restrictive capital definitions, higher risk-weighted assets in terms of the Basel III measurement. As the interim CEO indicated, all entities will be looking at reducing operating expenses from the perspective of cost to income ratio and that will allow for all entities to be in a position to upstream more to the parent,” said Sadler in response to capital flowing up to NCBFG, the company.