NCB Capital Markets establishes eastern Caribbean beachhead
NCB Capital Markets Limited (NCBCM) will open a small office in Barbados, once regulators give approval, through which it plans to tap into the island's pool of conservative yet affluent residents, says chief executive Steven Gooden.
It gives the investment company a toehold in the eastern Caribbean under what appears to be a measured strategy to expand the brand regionally.
NCBCM already has a presence in Trinidad & Tobago after buying up and rebranding a financial firm that belonged to another Michael Lee Chin company.
Parent company National Commercial Bank Jamaica, which is majority owned by chairman Lee Chin, advised the market at midweek that subsidiary NCBCM is to establish an office in the eastern Caribbean island of Barbados and is awaiting a securities dealer licence from the Barbados Financial Services Commission.
The company will trade as NCB Capital Markets (Barbados) Limited. It was incorporated on May 27, 2015 and is to set up shop in Worthing, Christ Church.
NCBCM is entering Barbados, as Gooden described it, as a greenfield operation that is meant to be a hub for investment banking business in the subregion.
"We are actually starting the broker dealer from ground zero," he said.
Despite its economic challenges, he said Barbados "is on a path to recovery with a number of attractive corporate and government projects in train that are in need of financing."
NCBCM sees "an opportunity to offer attractive investment solutions for retail and institutional clients in a market that is conservative but affluent," the CEO said.
NCBCM through its Cayman Islands office is currently financing a condominium development in Barbados and has several other deals lined up, but Gooden was mum on the specifics of those transactions.
The Barbados office is looking to corner business in the east, while the T&T office "focuses on the southern Caribbean including Guyana, Suriname and the ABC Islands - Aruba-Bonaire-Curacao," said Gooden. The Trinidad outfit, formerly AIC Finance Limited, was rebranded NCB Global Finance Limited after its acquisition.
Additionally, the company is also refocusing its Cayman Islands subsidiary, NCB Capital Markets (Cayman) Limited as a regional offshore wealth management hub, Gooden said.
The investment to set up the Barbados office, he said, is fairly minimal - "Its going to be a relatively small shop with three to five individuals" - and will have back office support from Cayman and Trinidad.
Gooden declined comment on just how much business he expects to flow through the Barbados hub, saying only that NCBCM will focus on "both organic and acquisition opportunities to scale the business to a comfortable market position".
Additionally, NCBCM's presence in Barbados will be used to pursue expansion opportunities for other business lines within the NCB group.
Gooden outlined a five year development plan for NCBCM, under which the company will work on integrating operations in its current markets while expanding into new ones.
The plan will see the positioning of the Trinidad and Tobago operation as an investment banking hub for the southern Caribbean including Guyana, Suriname and the ABC Islands.
NCB Global Finance is applying for a securities dealers licence to complement its current merchant banking operations.
Inside Jamaica, NCB Capital Markets is a top wealth and asset management firm that caters to both individual and corporate clients.
Currently, NCB Capital Market's repo funds under management is just under $85 billion, which Gooden said "puts our market share at around 28 per cent, the second largest in the industry."
It is also the third largest player in the expanding unit trust market. The Financial Services Commission at its last industry review, said NCBCM had an 11.5 per cent share at yearend December 2014. Gooden indicated that the company's holdings have climbed since then.
"Since the launch of our unit trust products, less than two years ago, we have grown to $22 billion in unit trust assets under management. This places us as the third largest player of five with a market share close to 16 per cent," he said. "We expect to meet our target of being in the top two in the next two years."
Like the rest of the securities industry, NCBCM has been shifting from on-balance sheet repos to off-balance sheet client managed funds, under which unit trust investments fall. The company is also focusing on bonds and mutual funds.
Under this strategy, the Cayman operation, for example, has doubled its assets under management to US$200 million for the financial year to date, the CEO said.
"Our Cayman operation, which also includes an offshore private bank, serves as our regional wealth management hub. It targets ultra-high net worth individuals across the Caribbean with a service model centred on wealth accumulation, wealth preservation and intergenerational transfer of wealth. We expect continued growth in this business as we expand our relationships across the Caribbean," he added.