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NCB Financial Group Limited (NCBFG), the largest financial institution in Jamaica and the Caribbean, has announced that it will pay a dividend of $0.50 per share to its shareholders on Dec. 18, 2023. This is the second dividend payment this year, after a hiatus of more than two years due to the Bank of Jamaica’s (BOJ) restriction on dividend distributions by deposit-taking institutions amid the COVID-19 pandemic.
The dividend declaration is a testament to the leadership and business acumen of NCBFG Chairman Michael Lee-Chin, who has steered the group through the challenging economic environment and ensured its resilience and profitability.
Lee-Chin, a Jamaican-Canadian billionaire businessman and philanthropist, is the founder and CEO of Portland Holdings Inc, a privately held investment company that owns a majority stake in NCBFG. He is also the chairman of the Economic Growth Council (EGC), a body appointed by the Jamaican government to advise on policies and initiatives to achieve sustainable and inclusive growth.
Lee-Chin’s journey through this period was marked by a series of tough but necessary decisions aimed at preserving NCBFG’s capital. This included reinvesting profits back into the bank, notably its subsidiaries National Commercial Bank Jamaica Limited (NCBJ) and Guardian Holdings Limited (GHL), which are the primary income sources for NCBFG. Furthermore, Lee-Chin personally liquidated assets, including a megayacht and a beach property, to ensure his financial needs did not impact NCBFG’s performance.
Lee-Chin expressed his satisfaction with the dividend payment, saying that it was part of the group’s commitment to its shareholders. He said that the group had achieved its goals of strengthening its capital base and diversifying its revenue streams and that it had built a recurring dividend policy into its budget. He also said that he expected the dividend payment to boost the group’s share price, which had declined significantly in the past few years due to the dividend suspension and the market volatility.
The dividend payment will amount to $1.23 billion, based on the group’s outstanding shares of 2.46 billion. Shareholders who are on record as of Dec. 4 will qualify to receive the dividend, which means that investors who want to benefit from the payment will have to buy the shares by Nov. 30. The group’s largest shareholder, AIC (Barbados) Limited, which is a subsidiary of Portland Holdings, will receive more than $630.87 million or US$4.03 million.
NCBFG Interim CEO Robert Almeida explained that the dividend payment was made out of the undistributed profits that the group had accumulated over the years and that the majority of the capital was reinvested back into the group’s subsidiaries, especially its banking arm, National Commercial Bank Jamaica Limited (NCBJ). He said that this was a better practice than transferring the profits to permanent reserves within the bank, which would create accounting challenges over time. He also said that the group received dividends from its other subsidiaries, such as Guardian Holdings Limited (GHL), a leading insurance company in the Caribbean.
NCBFG is expected to release its unaudited financial results for the fourth quarter and the full year ended Sept. 30, 2023, on Nov. 21, followed by an investor briefing on Nov. 22. The group reported a net profit of $13.73 billion for the nine months ended June 30, 2023, which was 47-percent lower than the $26 billion for the same period in 2022. The group attributed the decline to the impact of the pandemic on its core businesses, as well as the impairment losses on its investments in Clarien Group Limited and Alignvest Acquisition II Corporation. However, the group also reported an improvement in its operating income, efficiency ratio, and return on average equity in the third quarter, compared to the previous quarters.
NCBFG’s share price closed at $65.63 on Nov. 19, 2023, on the Jamaica Stock Exchange, down by 7.73 percent from the previous day. The share price had reached a high of $225 in 2019, before the dividend restriction and the market downturn. The group’s market capitalization was $161.89 billion or TT$7.89 billion ($1.164 billion).
The upcoming financial results for the fourth quarter and the full year will provide further insight into NCBFG’s performance and strategic direction.
