‘I’m very happy now’
Lee Chin champions turnaround in NCB as customer service improves and declares ‘we are the people’s bank’
TEN months after declaring ‘I’m not happy’ in an article published in the Jamaica Observer on July 13, 2023, NCB Financial Group (NCBFG) Chairman Michael Lee-Chin is singing a different tune, declaring “I’m very happy now” as the noise surrounding the financial services group has quietened a bit as it adopts a renewed focus on efficiency, governance and customer service — the new EGC mantra under which the group now operates.
In a frank interview with the Business Observer on Monday, Lee-Chin and his management team at the NCB Financial Group — particularly Robert Almeida, CEO of the NCB Financial Group; Bruce Bowen, CEO of its commercial banking arm, NCBJ; and Ian Chinapoo, CEO of its insurance subsidiary Guardian Holdings Limited (GHL) — were collectively breathing a sigh of relief as they reflected on the last few months and the work they had to put in with the staff to arrest a decline in standards.
“Prior to July last year, there was a lot of angst and nervousness in the marketplace about what is happening at NCB. The ABMs, when customers go to them, they are on sometimes, most of the times, but they were also off a lot of time, so it wasn’t consistent. I heard a lot of noise about no dividends in the marketplace and customers are complaining. The customer complaints were just noisy and rampant. So that was where we are coming from,” Lee-Chin reminded.
“The second thing is just resolution of problems. I remember in August [last year] I was walking at 6 o’clock in the morning and someone sent me an audio and this lady was on the social media and she said ‘NCB is a scam bank. [It’s] a ghetto bank. Take your money out of NCB.’ Remember, this as I said came to me at 6 o’clock in the morning. I thought, that was dissonant, because, NCB, scam? Ghetto? You mad? NCB?….So, I called the EGC champions and I said, ‘look, guys, we have to fix this today. It was fixed by 10:00 am and I called that lady at noon and she went on the social media and said exactly what happened, and it was a reversal [of her earlier comments.] But that just gives you a sense of where we are coming from. So today, that noise is not there anymore and we are going to work to make sure that such things are one-off in the future, because we won’t be perfect, but we are focused on being like a utility: always on.”
For Bowen, after being issued the mandate by Lee-Chin to refocus the bank, he met with staff to work out the “pain points” — the things people were talking about — to get them fixed.
“We said we feel we could make a big impact if we first focus on those things and we said ‘ABMs, if we really focus we can show both that we are listening to our customers and show the team that if we are really focused on something, we can make a big difference. So it was ABMs, reducing fraud cases and speeding up the investigations so that we can get back responses to people more quickly,” he said.
He said the bank is also piloting a solution to improve the customer service on SME deposits, another area of complaint. Now it takes 24 to 36 hours for deposits to be reflected in accounts. Bowen wants that to be done much faster.
It is part of the change which Lee Chin has driven over the last 10 months and even though it’s early days yet, the results are showing.
The NCB Financial Group has paid a dividend for three consecutive quarters after almost three years of none. The latest is to be paid on June 10, a $0.50 per share dividend to shareholders on record as at May 27. As for automated banking machines (ABMs) last year they were out almost 20 per cent of the time at one point, but now that down time has been reduced to three per cent with the latest data showing the bank’s machines are up 97 per cent of the time.
“Today, you don’t hear the noise about ABMs anymore. So we are happy about that. It shows that whenever we focus on an issue that is an irritant, we solve it. The staff rallied and solve it, which shows that we are listening.” Lee-Chin said even so, he is not happy and wants that to improve the ABM uptime to 99 per cent.
At the same time, its latest financials published last Thursday showed profits grew 98 per cent over the first six months of NCB Financial Group’s current financial year from $6.91 billion last year to $13.71 billion in the current year. And what about customer service? That has improved as well.
“We have tamped down the noise by paying attention,” Lee Chin outlined.
He also pointed out that the bank has become more efficient. Its costs which ate up almost 80 per cent of its income last year, has declined and now takes up just under 67 per cent of income “leaving more money available to pay shareholders”.
“At 67 per cent, there is 33 per cent left for shareholders, so to go from 20 per cent to 33 per cent, that’s a 13 per cent increase which is 65 per cent improvement in cost to income ratio,” Lee-Chin noted. He wants to push that cost-to-income ratio down further to around 55 per cent with the expressed aim of enabling the NCB Financial Group to pay more dividends as costs decline as a percentage of income.
“So, we are tamping down the noise that was causing a lack of confidence in the organisation, so I really have to give kudos to the staff to really being responsive to the customers,” Lee Chin continued.
But the NCB Financial Group chairman said the turnaround being seen now is just the beginning. EGC has become a culture throughout the group, not just in NCB Financial Group’s Jamaica operations, but also in its Guardian Holdings Limited (GHL) subsidiary which is based in Port-of-Spain, Trinidad and Tobago, while operating in 21 markets across the region.
Ian Chinapoo, the Guardian Holdings CEO who was part of the interview via
Zoom, outlined what has been done so far by the regional insurer to get in line with the overall change in direction for the group.
“We followed that EGC. We engaged our team, we got a challenge, we heard about it through the chairmen — both Mike for the Group and Robert Almeida as the chairman of GHL. I will never forget that call when Michael called me and he said, “Listen, do you know what you need to know?” I said, “What do I need to know?” and he said “EGC.” And then he explained it. So we have a version, a very intense version of it ourselves and the challenge was exactly that. We engaged the team. We already had some cost-savings initiatives into our budget, but we went again, we went again in July and we actually targeted another TT$39 million which is about J$897 million, and by the time December 31st hit, we had gotten to TT$54 million which is J$1.242 billion [in savings] and that is just looking at core operations,” Chinapoo said.
He added that in the January to March quarter, GHL realised another TT$15 million in savings (about J$345 million). Altogether so far, GHL has cut more than $1.5 billion in costs. That’s on top of “approximately $10 billion” in costs that have been cut at its sister company, NCBJ.
“Just like NCB we had challenges in terms of turnaround of claims, which is what we are here for,” Chinapoo continued as he outlined the challenges faced by GHL.
“We had challenges with people having access to us to make payments on time, etc. So we ramped up our investments there. We focused, we prioritised, we drop things, we delayed things that did not have the impact. So we now have 80 per cent of our claims being settled in three days — that’s down from nine days for claims that have no problems being settled. The 20 per cent that is not settled in three days sometimes takes weeks and they are for things where we have to investigate fraudulent claims and third-party claims.”
Chinapoo said he has also aligned GHL more with NCB, with both entities sharing expertise with the focus on growing revenues from each customer. Banking folks get to market to insurance clients and also at the company’s capital markets arm, NCB Capital Markets.
“We are not done yet, is my message. We are looking at things differently in terms of how we interact and how we do it.”
He said just like in Jamaica, where executives were separated from NCB Financial Group, the same was done in Trinidad and Tobago at GHL.
“And you know what, we made some tough calls. We have each de-layered quite a bit and we are running the business with fewer executives, quite frankly. I believe, those are things we have to do in business. I think it’s well-known in Jamaica what NCBFG did, but in Trinidad and Tobago we also did, and across the region we also did, I mean, maybe not as dramatic as the timeframe in which Mike did it in. But we certainly followed up. If you can run a business with fewer people doing more, that’s efficiency.”
Chinapoo’s boss, Almeida, said that efficiency is key to improving cost to income.
“If we can grow our business about eight per cent to 10 per cent every year and you hold your expenses growth to three per cent, then you can do the math and see cost-to-income going down over time until we reach our target,” he added.
Lee-Chin himself outlined how those costs will be cut further.
“Banking and insurance are really commodity businesses, meaning, you can get them anywhere, right. And when you are in any commodity business, you want to be the lowest cost producer, right. And NCB, Guardian — in our dominant markets we are very dominant. So we should have the benefits. We are at scale, so where we are going is to make sure that we bring down our cost to be the absolute lowest cost producer in the marketplace, and then the value add is really wealth creation for the customers and the customers would include corporates and individuals.”
Bowen, the NCBJ CEO, called the savings realised so far “the low-hanging fruits”, and said there are other areas that are being looked at to reduce costs.
“Now we need to get into a kind of optimising our operating model to say, “OK, how can we, to take an example, straight-through process an auto loan so that it is touched by fewer human hands that have to do things, so that we can turn around the decision and get people their cars in half the time at a lower cost because fewer people are looking at it. Those are the type of things that will be looked at over the next six, 12, 18 months, to get more efficient. We will be taking out more manual processes to ensure the system is operating.”
Lee-Chin himself has taken on a new role in the bank. As chairman, he has rolled up his sleeves and has engaged on a blitz, going out to communities, meeting NCB customers on the road, such as taximen, and hearing their grouses with NCB. He has visited numerous businesses to listen and reassure. He has even been to the Coronation Market in Kingston, the largest fresh produce market in the country and the English-speaking Caribbean, to listen to vendors and customers about issues they are having with NCB and to implement a fix.
“I am very happy now,” Lee-Chin recounted as he reflected on all that has happened since he returned early from a three-month leave of absence from the board last July to get more active in fixing the issues that were plaguing the bank.
“Coming into the organisations, we have to learn it. That’s the first thing. Learn what the nuts and bolts issues are, and you can only find out what those issues are when you are in the organisation from an operational standpoint. Secondly, we had to rally the staff towards a North Star that we all agreed to. Thirdly, we were able to make public announcements and live them. In other words, on August 11 we said we were going to pay a dividend before the end of the year and we did. That was the first dividend in nearly three years and that affected all our shareholders, including pensioners.
“So today, we are very clear as to where we are going. That’s why I am happy.”
He said when he took over the bank in 2002, the aim was to ‘Build a Better Jamaica’, repeating a slogan the bank once used.
“That’s the ultimate and we can only build a better Jamaica by making the individuals — every citizen — wealthier, or wealthy. And corporations wealthier or wealthy. So, we are now clear as to what we want to do, what our goals are in terms of we have to ensure we are the lowest cost producer across the NCB Financial Group. We will be the lowest cost producer and we are on the trajectory to do so,” he said.
His chief of staff, Maureen Denton, who sat in on the interview, interjected.
“We talk about what has happened since last year to the present. And all the things said here are absolutely correct. But to effect the type of change one has seen at NCB from last year until now, the focus, one cannot ignore, leadership and also infusing a new and different type of culture,” she said.
She said NCB Financial Group had gotten complacent. Communication was not good, neither internally nor with customers, and what has been worked on over the months now is how to significantly improve the communication internally.
“It’s building the trust. It will take a while, but there is a fire. There is something that is igniting and only thing that will happen is that it will blaze more and more. This is only the tip of the iceberg,” Denton said.
“Overarchingly, we are the people’s bank and Jamaicans expect a lot from NCB, and we have to make sure that we live up to those high expectations,” Lee-Chin closed.