With there now being a new direction and path going forward, NCB Financial Group Limited (NCBFG) will be aspiring to further extract synergies among its subsidiaries as it looks to continue its regional expansion and ambitious profitability targets.

NCBFG is a financial conglomerate with a $2.23-trillion balance sheet and a presence in more than 21 countries across the Caribbean through four core subsidiaries. Despite this platform which has been built up largely over the last seven years through myriad acquisitions and capital investments, the subsidiaries are still aligning closer under the group umbrella.

Following the recent changes in the last quarter, NCBFG interim Chief Executive Officer (CEO) Robert Almeida has highlighted that the new frontier will be through extracting the synergies of the group which will improve earnings without an incremental jump in capital required to expand the plans. This follows recent changes at TFOB (2021) Limited which has been integrated deeper with National Commercial Bank Jamaica Limited (NCBJ).

“While we’re doing this reset, that is actually the big opportunity that’s in front of us going forward. To date, we’ve continued to have not actually extracted or realised on the synergies within the broader group across the subsidiaries. There’s no point integrating bases that aren’t efficient. The first thing is to make sure that each individual business is operating exceptionally well, but we have this really big opportunity in front of us which is to realise the synergies of the broader group,” said the interim CEO at the investor briefing held on Thursday.

NCBFG’s restated 2022 consolidated net profit topped $35.13 billion with profit attributable to owners at $23.89 billion. Almeida described this as the sustainable base for the group which will focus on delivering a return on equity in the double-digit area while not violating chairman Michael Lee-Chin’s 3Ds policy. The 3Ds involve not being distracted from the core business, it doesn’t dilute shareholders and doesn’t impinge on consistent and growing dividends.

However, for the 2023 financial year (FY) ending September 30, NCBFG’s consolidated net profit dropped to $15.34 billion with net profit attributable to shareholders at $7.59 billion. This drop was largely driven by the one-off separation costs related to the departure of several executives at the NCBJ level and that of the two former executive directors. According to Almeida, if these one-off costs are removed, NCBFG’s profit attributable to shareholders would have been closer to $20 billion.

“It’s actually kind of like the next chapter after what I laid out, here’s what we need to get to a sustainable business model, the blueprint. The next chapter after that is actually realizing on the power of this group platform and the team is ready for that, starting to move in that direction. That probably won’t accelerate until after 2024,” Almeida added on the plans for integration.

Part of this integration has begun at the NCBJ level with the formation of the newly established wealth management division to be led by Dr Karrian Hepburn Malcolm starting December 4. This is meant to leverage the strength of NCBFG to provide clients across the region with a full suite of financial services by first maximising the sale of investment and insurance products in Jamaica under NCBJ. Other recent executive hires to NCBFG include Belinda Williams and Maureen Denton within the last two months.

Lynk will be launching a virtual card during the quarter and expects to launch its partnership with GraceKennedy to offer Western Union remittance services on the mobile application.

“In terms of efficiency, you’ve heard what we’re doing on the capital side. On the operational side, we’ll extract a lot more efficiencies because what was a big observation to me personally was this back office is really a logistics centre. We don’t have any processing engineers and we’re bringing in process engineers to make sure that our processes are a lot more optimised. Overall, this whole EGC strategy that we’ve embarked on has really evoked in the entire organization a focus on being a lot more efficient at the levels I just mentioned operationally and capital wise,” the chairman replied in a post media briefing where he highlighted that complaint volumes decreased at the call centres in recent months.

NCB Capital Markets Limited (NCBCM) has already broken ground with its new Guyanese subsidiary which is currently awaiting a broker dealer licence from the Guyana Securities Council. According to recently appointed NCBCM CEO Angus Young, the Guyana office should become NCBCM’s South American Hub with the next destination of interest being Suriname under its hub and spoke model.

Guardian Holdings Limited (GHL), which NCBFG acquired majority interest in May 2019, continues to be the strongest growth engine in the group based on its insurance revenue peaking at TT$7.24 billion under IFRS 4 with consolidated net profit at TT$1.10 billion. GHL CEO Ian Chinapoo noted that GHL has already cut operating costs by five per cent while growing gross written premiums by $8 billion (TT$345 million) under the new reporting standard of IFRS 17. He noted that there is already a plan in place through technology investments to further cut expenses by up to 15 per cent in 2024.

“As we adopt and embrace EGC (efficiency, governance and customer xperience) and manage our expenses and refine our operations to be most efficient, we’re also continuing to invest in technology to enhance our customer experience. We are significantly invested there and we’re implementing a new life, health and pensions insurance platform which would greatly improve our ability to respond to customers, our turnaround times on claims and all of the things that our reporting metrics for our regulators, auditors and shareholders will all be improved as we make these investments. The plane is in the air, enhancing the engines and improving on all of the things that make the flight and enjoyable one,” Chinapoo added.

GHL’s nine-month financials under IFRS 17 revealed that its insurance revenue has increased 13 per cent to TT$4.09 billion with consolidated net profit at TT$386.27 million (J$8.83 billion). NCBFG Chief Financial Officer Malcolm Sadler noted that NCBFG will be reporting under IFRS 17 as of October 1 and that its financials will be restated in the new FY.

Clarien Group Limited, which NCBFG acquired 50.10 per cent interest in December 2017, was able to grow its net profit for the 2023 FY to BM$11.2 million (J$1.73 billion) with the non-performing loan ratio dropping below six per cent. Its CET1 capital ratio and liquidity ratio were also above 27 per cent and 170 per cent, respectively.

While not ruling out the potential for a future North American acquisition, Almeida referenced the 3Ds as the key element for those future considerations. GHL is currently building out a subsidiary in The Netherlands.