CEO-designate of The Barita Financial Group Dane Brodber said he is “definitely happy” that the legal issues with the committee of management for Rita Humphries Lewin — ­the entity’s former majority shareholder and founder — are over, adding that the company can now focus on its business, including taking advantage of falling interest rates to diversfy its revenues.

The committee managing Rita Humphries-Lewin’s affairs had sought the court’s help in reversing over $2 billion in transactions between her and investment firms Cornerstone and its subsidiary Barita, citing concerns about her mental competence to execute the deal due to a dementia diagnosis. The transactions in question involve the sale of 28.2 million Barita shares worth over US$15 million to acquire 1.4 million Cornerstone shares in a private offer in September 2021.

But in late October, the parties reached an agreement, the details of which have not been made public, and which saw the management committee withdrawing its case and apologising to Cornerstone and its subsidiary Barita Investments as well as the entities principals Paul Simpson and Jason Chambers, bringing the matter to an end.

“We understand that our stakeholders and clients [were] as invested as we were in this matter and of course the resolution of that matter, and we are definitely happy that this long-standing matter has been resolved, and now we are now able to fully focus on the normal course of our business, being a lot more sure-footed with our strategy and really serving our stakeholders and customers with the highest level of integrity and business acumen,” Brodber said in responding to a question on the issue from what appeared to be a prepared statement.

“Now of course we are bounded by the advice of our legal team and what we are able to disclose which for now is limited to the statement that [was] issued by the committee of management of Rita Humphries Lewin, which was published in the newspaper which withdraws and shows regret for the allegations of wrongdoing against Cornerstone and Barita and its officers, Mr Paul Simpson and Mr Jason Chambers,” Brodber added.

Those issues now behind it, CEO of Barita Investments Limited Ramon Small-Ferguson said the company will be focusing on continuing its growth with the main target areas being revenue diversification and maximising financial efficieny while minimising risks through adjusting the mix of assets, liabilities and equity it holds.

“That works very well in this evolving monetary policy environment,” Ferguson-Small outlined as he signalled that Barita will look to take advantage of the opportunities presented as the central bank cut its key policy rate to return to the market to raise debt capital.

“It could give us an opportunity to diversify the liability side of our book away from existing sources, so that is another potential point of appeal,” Small-Ferguson added.

He pointed out that after raising $135 billion in equity capital since 2018, the company remains overweighted in that asset class, with capital adequacy ratio of 25.5 per cent, well outpacing the 21.2 per cent average its peers report and also way above the regulatory minimum of 10 per cent.

“While that is great from a risk management perspective, it could also imply that there is room for us to allocate and utilise some of that capacity with the objective of generating more returns… So it means that there is room for us to potentially grow our leverage especially with [us going into a] low interest rate environment.”

That low interest environment is also expected to impact the stock market which has been in a slump for the past few years.

“We’ve already started to see a pick-up in interest in the equities market, that’s being complemented by improving earnings which is of course the main fundamental source of value from an equity perspective. So, our outlook for the equity market is improving; it’s positive. We have been saying that the market is at a place where people start to get selective and should start to go shopping,” he highlighted.

He added that though there has been a slowdown in new offers to the public, the shift in monetary policy and indications that the cap on funds junior market listed companies can raise would be increased by 50 per cent from $500 million to $750 million could cause a positive shift for equities.

“I think those two things could be catalysts for an increased number of listings…but we will see. But broadly I would say the outlook is much more positive than what is behind us.”

The timing of the pending increase in the cap on funds raised by junior market companies is yet to be communicated.

That aside, the Barita Financial Group CEO-designate who now performs the role of acting CEO for the Cornerstone Trust and Merchant Bank said part of focusing on its business, is getting the restructuring of the group finalised by early next year.

Under the Banking Services Act, the law passed in 2014 which governs how the Bank of Jamaica (BOJ) regulates the provision of banking services in Jamaica, financial groups with a deposit-taking institution –i.e., a commercial bank, merchant bank or building society– must restructure their operations into a financial holding company (FHC) with its parent company overseeing its subsidiaries that operate in various financial sectors, such as banking, securities and insurance.

So far, seven entities have received approval from the BOJ to reorganise into an FHC — NCB Financial Group, ScotiaGroup Jamaica, JMMB Financial Group, JN Financial Group, Sagicor Financial Group, VM Financial Group and GraceKennedy Financial Group.

The BOJ on Monday confirmed that only Cornerstone’s application for an FHC remains outstanding for approval.

“We are far advanced in our preparation and we expect to have our shareholder meeting early in calendar year 2025 and we look to complete the reorganisation early in that year as well,” Brodber said of the application that will reorganise the Cornerstone Group which will take on the name Barita Financial Group. Its identified subsidiaries so far are Barita Investments Limited and its subsidiary Barita Unit Trusts Management Company Limited as well as Cornerstone Trust and Merchant Bank.

For the 12 months comprising Barita’s financial year which ended September 30, the company reported profit of $3.9 billion which was up 14 per cent from the outturn for the prior year.