NCB Financial Group (NCBFG) Chairman Michael Lee-Chin said recent selling of the company’s shares by himself and a former executive should not be seen as an indication of any insider knowledge of instability that is being acted on, adding that people sell shares for various reasons, including their own financial needs.

Lee-Chin, who was one of three guests from NCB Financial Group (the other two being NCBFG CEO Robert Almeida and NCB Capital Markets CEO Angus Young), invited for an investor briefing by Mayberry Investments Limited (MIL) on Monday has been offloading shares, causing concerns. Through his AIC (Barbados) Limited – the entity through which he owns a majority stake in NCBFG – Lee-Chin, during the last financial year which ended September 30, sold 34.6 million shares, while a disclosure since then to the stock exchange showed a further 9 million shares were sold on October 29, most likely also by AIC (Barbados).

At the same time, Patrick Hylton, NCBFG’s former CEO, has also been selling from his stake in the financial conglomerate, offloading 13.7 million shares, roughly a quarter of his stake, all in the July to September period.

Gary Peart, who was recently promoted to the role of CEO of Mayberry Group and chairman of Mayberry Investments Limited (he previously held the role of CEO of Mayberry Investments), noting the sales, raised the issue with Lee-Chin at the investor briefing.

“You as the majority shareholder, between yourself and your companies, you control in excess of 1.2 billion shares in the company, even now valued at over $70 billion (sic) and [a] former executive selling as well…If we are seeing what we are seeing from the outside. Why would these key people, who would know what the potential of this business is, why would they be selling, because if they stop selling tomorrow, we are of the opinion that it is a $90 stock,” Peart opined.

But Lee-Chin was quick to point out there was nothing behind selling the shares, at least in his case, other than the need to raise funds for his own purposes. The share sales was valued at just over $2 billion.

“Everybody has to make their own capital allocation decision. So not because I have sold shares means that I don’t have any confidence in the company,” Lee-Chin said.

The 43.7 million shares sold by AIC (Barbados) represents about 3.5 per cent of the total 1.23 billion shares Lee-Chin owns through the entity. He holds other shares through connected party entities, which brings his total stake in the NCBFG to 1.436 billion shares or about 55.9 per cent of the total 2.584 billion NCBFG shares.

“I have sold shares and you have seen how active I am in the business. Everybody has their own planning needs, their own capital allocation needs, which may not have anything to do with how well the business will do or is doing. And at the same time, if you are selling into a market that is illiquid, then it takes a lot longer [to sell], but on the flip side, there is an opportunity to buy at these prices, which, by any measure, it is giveaway prices, basically,” Lee-Chin added.

NCBFG’s share prices have been hovering around the $50 mark since mid-year 2024, down from around $75 in the middle of 2023. It is down 24 per cent year to date and remains significantly below its peak price of $249 reach in July 2019. Profits which were $3.3 billion in the 2023 financial year, due mostly to one-off expenses of $8 billion, have since recovered to $15 billion in 2024, while dividend payments that have been absent during the pandemic, return on a regular basis for the last three quarters. A final dividend of 50 cents is scheduled to be paid on December 13, 2024.

Despite the concerns, Lee-Chin was unperturbed.

He said the three preconditions to wealth creation are now found in the stock’s price which should make it attractive for any investor, naming them as a difference between perception and reality, the inefficiencies now in NCBFG which has caused it to be spending more than 71 per cent of its income to cover the cost of running the business, a ratio he said he wants to get down to “below 50 per cent”, and the third being the fact that there must be a lack of capital.

“When you have those three come together, it’s magical, and if you think framework wise, those three preconditions are alive and well” in NCBFG, he pointed out. He said bringing down costs will be key moving forward as well.

“We are blooding our eyes to make sure it is done, because we are not here to just be mediocre. We are here to make sure that whatever we do anywhere in the world is of acceptable standards, world-class standards.”

Peart acknowledged that his interpretation of Lee-Chin’s pronouncement is that investors should “buy, buy, buy NCB”.

Dan Theoc, senior vice-president for investment banking at Mayberry Investments Limited, who also acted as host for the investor briefing, said his analysis showed the stock’s price is primed for increasing given the gains made so far and the additional gains that could be made with the plans outlined by the company to cut costs.

“I fully expect this stock to bounce back to round about $96 in the next 12 to 15 months,” Theoc said. That level of price gain would be close to doubling what it is now.

“I would be shocked if in the next six to twelve months we don’t see significant growth in the stock price. It’s a leading bank, well capitalised and well positioned and is achieving these results with all the headwinds, high inflation, high interest rates, and a lot of chop going on.”

He acknowledged that though the stock price has been declining, “There is no logical reason why that should be because, in fact, in the last four quarters they have been delivering results.”