DESPITE significant changes taking place over the last year Michael Lee-Chin, chairman of NCB Financial Group Limited (NCBFG), and other executives, expressed dissatisfaction at some of the remaining pain points and have made remedying these their key objective for the 2025 financial year (FY).

These comments were expressed on Friday at NCBFG’s investor briefing, after the release of its unaudited fourth-quarter report and 2024 FY results. This was the first full-year after several senior leaders across NCBFG departed the group while Lee-Chin has taken on a more active role in the business under an EGC (efficiency, governance and customer experience) thrust under which he wants to boost returns to shareholders while improving customers experience when they interact with the bank and at the same time, making internal processes more transparent.

The chairman pointed out that since that thrust last year, the group’s cost-to-income ratio has declined from 86.30 per cent to 71.60 per cent, a development which he highlighted has improved the group’s margins from 13.7 per cent to 28 per cent. The overall return on equity in the financial group’s last financial year also improved from 2.54 per cent to 9.47 per cent.

However, these improvements are not enough for the majority shareholder who wants to see costs being no more than half the income earned in the NCB Financial Group while he wants returns for shareholders doubling its current level to be closer to 20 per cent.

“In terms of customer experience, as you know, one year ago it was very, very noisy in the marketplace. Customers were overtly not happy. We have tamped that down significantly by being present with customers at their home, business place, and we’re in the field — we’re dealing with issues efficiently, as they come up. So, we’re on a good path now; we have come a long way, but still a far way to go. We’re still not happy with what our customer service is but again, directionally, the turnaround is obvious,” Lee-Chin stated.

As part of this push to improve customer experience, National Commercial Bank Jamaica Limited (NCBJ) has been working overtime to improve ABM availability as the bank gets ready for the implementation of the new ABM standards set by Bank of Jamaica (BOJ). Also, NCBJ is in the final stages of bringing its virtual Visa debit card on the Lynk mobile application to fruition, as it seeks to introduce the latest product to enable contactless payments with mobile phones, after its NCB Pay mobile app.

“We are in fact seeing more robust demand for financing. Where we have positioned ourselves in that area, is to try and make the process easier for SMEs — essentially trying to ensure that decisioning [regarding financing] can be improved. We’re not satisfied with the time it takes to give an answer to an SME for loans, and we know many times their applications or considerations for financing are very time-sensitive,” said Sheree Martin, NCBJ’s executive vice-president – Retail Banking Division, on areas of improvement.

Martin noted that there was a 120 per cent increase in business on the SME segment for the 2024 FY, while there was an 89 per cent increase in new accounts on the consumer side. This NCBFG segment saw a 16 per cent rise in revenue to $44.34 billion, with the business line recording an operating profit of $1.81 billion compared to an operating loss of $720 million.

NCBFG’s fourth quarter saw its net operating income dip seven per cent to $25.83 billion due mostly to a surge in unpaid loans in its corporate and commercial banking segment to $8.7 billion compared to $4.2 billion dollars a year earlier. Net claims amounting to $400-million for clients impacted by Hurricane Beryl also put a dent in operating income for the July to August quarter.

Company Secretary Dave Garcia noted that efforts to finalise the sale of NCB (Cayman) Limited and a portion of the Bermuda-based Clarien Group Limited are still ongoing with regulatory approval still outstanding. It was revealed that Clarien Group paid a US$3.75-million dividend during the fourth quarter, with NCBFG collecting US$1.88 million of the amount. The remaining balance went to Clarien’s two other shareholders.

NCBFG’s financials also got a makeover due to the accounting rule switch from IFRS 4 to IFRS 17, which brings a more standardized and transparent approach to insurance accounting. By adopting the IFRS 17 framework, NCBFG restated its 2023 numbers, to provide a more accurate comparison with 2024’s financials. As a result, NCBFG’s 2024 net operating income was up 4 per cent to $120.01 billion dollars from the restated 2023 operating income of $115.37 billion. Last year, using IFRS 4 for its insurance accounting, NCBFG stated net operating income of $137.26 billion, with the restated figure being lower showing the impact IFRS 17 has had on its income. Its consolidated net profit skyrocketed 174 per cent from the restated $8.50 billion ($15.34 billion under IFRS 4) to $23.25 billion, with $15.02 billion being attributable to shareholders.

Total assets for FY 2024 improved five per cent from a restated $2.199 trillion (previously $2.222 trillion under IFRS 4) to $2.32 trillion, with investment securities at $917.86 billion, loans and advances topping $626.24 billion, and $95.65 billion of cash in hand and balances at central banks. Total liabilities rose four per cent to $2.10 trillion, with customer deposits at $783.97 billion, while equity attributable to shareholders grew 22 per cent to $174.45 billion — which was largely due to the $7.34-billion issuance of new shares to current and former executives plus the May additional public offering (APO). NCBFG’s average cost of debt is 9.4 per cent, with the $15-billion bond in August being fully subscribed.

NCBFG’s stock price closed at $50.51 on Friday, which leaves it not just down 24 per cent year to date, but also leaves it below the $68.49 opening price at the beginning of the 2024 financial year, and below the $65 APO price. NCBFG’s stock price closed on the Trinidad & Tobago Stock Exchange (TTSE) at TT$2.15, which leaves it down 37 per cent YTD and below the TT$2.77 opening price for the 2024 FY. NCBFG’s price-to-earnings ratio is 7.98 times.

NCBFG has declared a $0.50 dividend, totalling $1.29 billion, to be paid on December 13 to shareholders on record as of November 29. This makes it four straight quarters NCBFG has paid a $0.50 dividend, after a two-and-half-year hiatus, and means the dividend yield would be 3.96 per cent based on the current price. NCBFG has issued 117,042,019 new ordinary shares in its 2024 FY. Harprop Limited, NCBFG’s sixth-largest shareholder, has seen its interest in the financial conglomerate cut from 1.88 per cent to 1.80 per cent, after all of these share issuances.

Patrick Hylton, NCBFG’s former CEO, has cut his stake in the financial conglomerate from 60,838,988 shares to 43,113,038 shares during the calendar year, as he moved from the fourth-largest shareholder to the eighth-largest owner. Hylton offloaded 13,699,410 shares in the fourth quarter alone.

AIC (Barbados) Limited has sold 34,588,688 shares over the course of the 2024 FY to end September at 1,227,142,254 shares or a 47.49 per cent stake. There was also a recent disclosure that noted a connected party sold 9,092,308 shares on October 29 at $51.61 per share.

Among managers, Cameron Duncan, Jacqueline De Lisser, Martin, Anne McMorris Cover, Tanya Watson Francis and Angus Young all bought shares during Q4 2024. Ramon Lewis, NCBJ’s chief information officer, wasn’t listed in the Q4 report as a senior manager of NCBFG’s subsidiaries.

The National Insurance Fund (NIF), which is chaired by Professor Andrew Spencer, purchased 57,725,300 additional shares of NCBFG during the 2024 FY, and has risen from the seventh-largest owner to the third-largest owner with 90,864,532 shares or 3.52 per cent. NIF was also one of the largest buyers of NCBFG’s APO. NIF has been purchasing numerous securities on Jamaica Stock Exchange in the last three months, with its most recent purchase making it GraceKennedy Limited’s largest shareholder ahead of Resource in Motion Limited, a Donovan Lewis-controlled company.