NCB Financial wants staff to upskill to double profits
Published:Wednesday | December 4, 2024 | 12:07 AMSteven Jackson/Senior Business Reporter
Michael Lee-Chin, chairman of NCB Financial Group Limited, plans to help his workforce of over 5,560 become “exportable” to drive growth and double profits.
It aligns with the investor’s broader philosophy for freer movement of labour and capital within and beyond Jamaica.
“A lot of us in Jamaica want to emigrate,” Lee-Chin noted during his appearance as featured guest of the Mayberry Investor Forum on Monday, hosted by investment company Mayberry Group.
Lee-Chin said that NCB’s staff needs to improve on standards, critical thinking, and problem-solving. Improvement would upskill them globally, “so, if they emigrate, when they land in Timbuktu, they are employable” he said, referencing the kingdom in Mali.
Societies require the importation of labour and capital to develop, he said.
“That’s how Canada was built, and that’s how the USA was built,” he added. “Immigrants recalibrate standards. Immigrants build countries and keep countries from stagnating.”
He argued that, for Jamaica to grow its access to both capital and labour, the island must improve its overall standards. “We have a long way to go to make Jamaica globally investable.”
Jamaica’s private sector has been calling on the government to ease procedures for importing workers, as businesses struggle with a shortage of skilled labour. Some critics have suggested that upskilling the local workforce or raising pay could help retain and attract talent.
NCB Financial Group is aiming to double its consolidated profits to $50 billion, annually. A major part of this goal involves reducing costs across the financial group to 50 per cent of revenue. Expenses currently hover around the 70 per cent range, down from 82.5 per cent in 2023 when the financial conglomerate made its lowest profit in at least five years. The lower the ratio, the better.
“We should be in the 50s in terms of expense ratios. We have to do it because that’s what makes us competitive with global peers,” said NCB Financial CEO Robert Almeida at the Mayberry forum. He described the task as “tough work” but one that will lead to stronger financial results.
The financial conglomerate owns and operates Jamaica’s largest bank, National Commercial Bank Jamaica, as well as large insurance conglomerate, Guardian Holdings Limited, among other financial businesses in Jamaica and the region.
Reducing the expense ratio to 50 per cent would push the return on capital towards 20 per cent, Almeida said. “That really means you are doubling profits from where they are today,” he said, equating that to about $50 billion in profits for the entire group before minority interest, and $30 billion attributable to NCB Financial’s direct shareholders.
According to Dan Theoc, head of investment banking at Mayberry, this would result in NCB Financial’s share price reaching $150, or three times its current value.
“We’re just returning to where the institution was several years ago,” Almeida responded, noting that NCB Financial recorded a net profit of $30 billion for shareholders in 2019.
For its financing year ended September 2024, NCB Financial Group reported consolidated net profit of $23.3 billion. In 2019, when NCB Financial posted a record profit of $30 billion its cost to income ratio was 67 per cent compared to 82 per cent in 2023.