It has now been revealed that the departure of several senior executives of National Commercial Bank Jamaica (NCBJ) last September resulted in a $3-billion exit package, as seen in the bank’s 2023 audited financials.

The financials showed that NCBJ’s key management carried home $3.91 billion in compensation for the 2023 financial year, with $3.83 billion attributed to salaries and other short-term benefits. The management remuneration related to NCBJ directors highlighted $1.09 billion in separation costs and $1.90 billion in salaries and other benefits.

The only NCBJ executive on its board at the time was the previous Chief Executive Officer (CEO) Septimus “Bob” Blake, who resigned on September 30. The other executives who sat on the NCBJ board were Chairman Patrick Hylton and Dennis Cohen, who were employed as executives of NCB Financial Group (NCBFG), the parent of NCBJ.

NCBFG’s chairman and majority shareholder, Michael Lee-Chin, oversaw several radical changes in mid-2023 under his efficiency, governance, and customer experience (EGC) strategy. This was in a bid to save $6 billion to $8 billion annually for the financial conglomerate and assist it in restoring its dividend-paying nature. NCBJ paid a $1.77 dividend, or $4.63 billion, in September 2023 to NCBFG, which in turn paid its first dividend of $0.50 in nearly three years on December 18.

However, these changes also resulted in the departure of NCBJ executives Gabrielle Banbury-Kelly and Nadeen Matthews Blair, plus NCB Capital Markets CEO Steven Gooden and TFOB (2021) Limited CEO Vernon James. Notes covering staff costs pointed to termination benefits jumping by $1.58 billion to $2.23 billion in 2023, with wages, salaries, allowances and benefits moving up $3.83 billion to $20.94 billion.

The financials of TFOB and NCB Capital Markets are not public, with the consolidated financials not revealing the exact breakout of payments to specific senior executives.

However, the 2022 figures showed that key management compensation was $893.78 million, with management remuneration for directors at $199.59 million and termination benefits at only $649.33 million.

This drastic year-on-year increase highlights the cost that these separations had on the expenses of Jamaica’s largest commercial bank.

NCBJ was able to improve its net interest income to $41.69 billion, but a rise in credit impairment losses and a dip in other operating income saw its net operating income coming in at $70.33 billion — a moderate three per cent increase over 2022. Due to the increase in total operating expenses to $60.65 billion from higher staff costs and expenses, profit before tax dipped from $18.01 billion to $9.69 billion. Net profit was down 39 per cent, from $13.96 billion to $8.50 billion.

The bank’s balance sheet increased from $835 billion to $896 billion on the backdrop of a higher loan portfolio and pledged assets. Deposits topped $533 billion, which is the first time it exceeded half a trillion dollars, while its capital base grew to $106 billion.

NCBJ’s capital adequacy was at 14.7 per cent in June — well above the 10 per cent regulatory minimum and among the highest in the industry.

The departure of Hylton and Cohen from NCBFG resulted in a $4.83-billion allotment of NCBFG shares and a potential cash settlement of $1.03 billion. The overall separation/termination benefits line jumped from $863.66 million to $7.45 billion in 2023, based on the different executive departures.

NCBFG’s virtual annual general meeting will be held next week Friday at 10:30 am.

NCBJ staff returned in full force to its offices across Jamaica on February 1 as the group’s work-from-home policy was amended. It was reported on RJR that this move could save $600 million annually for the group.