BARITA Investments Limited (BIL) is positioning its near-to-medium-term growth on synergies from a restructured financial holding company (FHC) framework while accelerating phased monetisation of its $15.6-billion alternative investment portfolio.

Barita Investments Limited shareholders in January voted overwhelmingly for the company to reorganise itself, along with its sister company, Cornerstone Trust and Merchant Bank (CTMB) Limited, and its wholly-owned subsidiary, Barita Unit Trusts Management Company Limited, to becoming subsidiaries of Barita Financial Group Limited. The reorganisation, which is a requirement by law, is expected to be completed sometime this year.

Minority shareholders will retain unchanged ownership stakes, while operational synergies with sister firm Cornerstone Trust and Merchant Bank aim to enhance cross-selling and cost efficiencies with the management anticipating “seamless” integrated services by mid-2025, particularly in corporate banking and wealth management.

“The impact…we believe will centre around two potential outcomes,” Ramon Small-Ferguson, CEO of Barita Investments Limited, told the company’s investors at a briefing last Thursday. “One, is we expect to become more customer-centric. We expect to be able to more seamlessly offer complete financial solutions between Barita, the investment bank, and our sister company, Cornerstone Trust and Merchant Bank, the banking arm of the now financial group. We also anticipate benefits from efficiency, as we’ll now more clearly be able to share services across the group.”

The FHC pivot allows Barita to weaponise Cornerstone Trust and Merchant Bank’s $4-billion loan portfolio as collateral for structured products, while funnelling 22 per cent of alternative investment clients into CTMB’s transactional banking services. This operational fusion — enabled by shared risk management systems and a unified $35.5 billion equity base — cuts client onboarding times by 30 per cent and reduces cross-institutional capital charges by $1.2 billion annually.

Small-Ferguson said new products are already being created and more technology is being infused into improving client experiences.

“Revenue diversification is a critical underlining theme as well. We are broadening our revenue streams with the objective of reducing volatility in elements of our performance. In other words, we are growing the share of recurring revenue in our overall revenue base, hence certain focus areas within the business.”

He said the company is seeking to enhance the yield on its balance sheet, while also developing its asset management and capital markets businesses. “Generally, we’re seeking to grow the customer-oriented elements of our business. And that underlines, I’d say, our revenue growth and diversification strategy,” the CEO said.

He pointed out that the company is also ensuring it maintains adequate liquidity to enable it to take advantage of new opportunities as they come up. Barita Investments Limited maintains a robust liquidity buffer, supported by its strong capital adequacy ratio of 24.6 per cent, which is 2.5 times the regulatory minimum of 10 per cent.

The $15.6-billion alternative portfolio, including 1,900 acres of north coast real estate and private credit, enters its harvest phase. Development launches for select properties are slated for late 2025, with phased roll-outs expected in ensuing years.

“As it relates to segments of the portfolio, we anticipate that the development will be phased over time. So certainly visible activity this year,” he added.

The Bank of Jamaica’s recent cuts in its key policy rate from 7 per cent to 6 per cent was also pointed to as an opportunity for the company. It has already impacted its net interest income which grew 15 per cent year-over-year to $169 million during the first quarter of its financial year, which ended on December 31, 2024, as liability repricing outpaced asset adjustments, a trend expected to persist amid monetary easing. Overall, net operating revenue climbed 9 per cent to $1.4 billion, anchored by diversified income streams such as fees and commission income up 11 per cent to $905 million, fuelled by investment banking and asset management activities, while securities trading delivered $504 million in gains, up 56 per cent from realised and unrealised portfolio appreciation. This revenue mix reflects Barita’s deliberate shift toward recurring income streams, now constituting 64 per cent of total revenue versus 58 per cent in FY2024.

Its operating expenses grew as well, rising 9 per cent to $762 million, while net profit jumped 15 per cent year-over-year to $551 million.

Separately, Barita Investments said it halved its loan portfolio to $6 billion, following a strategic divestment, and redeployed capital into marketable securities, which rose 8.7 per cent to $118 billion.

Total assets edged down 2.1 per cent to $140 billion, while liabilities contracted 2.8 per cent to $104 billion, reflecting debt facility repayments. Shareholders’ equity grew marginally to $35.5 billion.