Police credit union tapping market for expansion funds
Published:Sunday | December 13, 2020 | 12:10 AM
The credit union representing the police and support staff is seeking to raise $110 million under a deferred share offer to its members and other eligible groups ,to upgrade and modernise the 65-year-old organisation.
This is a first for the Jamaica Police Co-operative Credit Union, JPCCU, the eighth largest in the movement, with a 23,000 membership base and $6.8 billion of assets. JPCCU operates five branches, located in Kingston, Portmore, Montego Bay, Mandeville, St Mary, and one full-service agency at the National Police College.
General Manager Wray Palmer told the Financial Gleaner, after Thursday’s announcement of the share offer, which is being brokered and arranged by MoneyMasters Limited, that the credit union needs funds to expand.
“The expansion of which we speak is not physical, but rather a technological expansion,” Palmer said as he ran down the to-do list of initiatives to improve service delivery to members that also includes family members of the security forces and support staff.
JPCCU intends to upgrade its banking platform to accommodate inter-bank transfers, develop its website and improve online banking services, and start the process towards development of an ATM network. Currently, JPCCU owns just one ATM, located at the Police Staff College at Twickenham Park, St Catherine. Otherwise, members have access to ATMs on the Multilink network, at a cost. JPCCU plans to add two other machines to its network, initially, Palmer said, which will be installed between Kingston and St Catherine.
The general manager said it is unlikely the credit union will add more staff to the 80 full-time workers on its payroll at this time, under the expansion.
The deferred shares will be available for subscription starting December 15. Only JPPCU members or new members falling under the credit union’s expanded bond, that is, those affiliated with national security and their families, are qualified to participate in the offer.
MoneyMasters president Claudette Crooks says the shares, priced at $1 each, will pay quarterly interest at an annual rate of 7.0 per cent, starting end-March 2021. The offer for the shares closes January 26, and will start paying interest to subscribers two months later, on March 30.
Depending on demand, the offer may be upsized by 50 per cent, Crooks said.
Palmer notes, however, that the JPCCU is proceeding cautiously, this being its first time trying to raise funds.
“We’re approaching it one step at a time, working in phases. This is the first time that we’ll be approaching the market, and we wanted to be disciplined about it. We will consider an upsize if it comes before us,” Palmer said.
JPCCU’s core banking system, Highgate, interfaces with the QNet system operated by the umbrella Jamaica Co-operative Credit Union League.
They plan to retain that system, but add other modules and functionalities, and “do the necessary upgrades so that we can unlock the true potential that is there,” Palmer said.
“The JPCCU deferred shares offer provides an attractive option for members while at the same time allowing the credit union to upgrade technology and grow. Members will have a larger pool of funds to borrow from,” Palmer said.
The credit union’s loan portfolio is currently valued at $5.9 billion.
Over 10 months to October, the JPCCU has recorded a surplus of nearly $77 million.