NCB touts milestone profit, to face regulator over GHL offer
NCB Financial Group and minority shareholders in Guardian Holding Limited (GHL) will face the Trinidad & Tobago Securities & Exchange Commission (TTSEC) in two weeks over the Jamaican bank's efforts to acquire GHL.
The minority shareholders, whose efforts so far have served to block the takeover, are demanding a better price than the US$2.35 per share that NCB initially put on the table.
NCB Financial President and CEO Patrick Hylton told the Financial Gleaner that it is unlikely the initial hearing on May 15 will result in a determination by TTSEC. He was unable to give an estimated timeline for any future meetings with the TTSEC and declined to speak on whether NCB would make another bid for the shares in the future.
"We do not know what is going to happen. I cannot make a prediction about what we will or will not do. In any event, we are unlikely to have a result on May 15. It is just the date of a hearing," Hylton said on Friday.
On that same day, the banking group touted its half-year earnings of $10.9 billion as a record for the stock market.
"We are the first company on the Jamaica Stock Exchange to surpass $10 billion in profit in a six-month period," said Dennis Cohen, chief financial officer and deputy CEO, at NCB's investor briefing on Friday.
Hylton added that NCB earned more in six months than all other companies on the JSE earned in a year, except for two firms. The bank will pay a dividend of 70 cents per share to stockholders, totalling more than $1.7 billion, on May 28.
Last year, NCB also set a record for annual profit at $19 billion, some of which was attributed to its investment in Guardian.
NCB Financial acquired 29.99 per cent of the insurance conglomerate in 2016 for US$3.24 per share, and launched a bid to increase its holding to to 62 per cent, at US$2.35 per share, through NCB Global Holdings.
However, a group of GHL minority owners, led by Peter Permell, filed a complaint with TTSEC objecting to the price, and alleging a breach of Trinidad's by-laws for takeovers.
Amid the review, NCB's offer for GHL lapsed, even though the bank had received acceptances from the 535 owners of 91.74 million shares, well clear of the 74 million shares targeted by the offer.
"At the hearing, a panel established by the TTSEC will review our acquisition of a significant interest in Guardian Holdings Limited and steps to acquire a further interest," said NCB Financial's legal counsel, Dave Garcia, via email, adding that representatives from the banking group "are also likely to attend", Garcia added.
Permell said in mid-April he would make no further comment on the issue until the hearing.
Beyond its ambitions to own GHL, NCB has been going after other regional holdings. The bank credited its new acquisition, Clarien Group of Bermuda, as well as the performance of wealth subsidiary NCB Capital Markets for the profit gain in the period ending March 2018. NCB recorded a $1.5 billion gain on the Clarien transaction, which it categorised as negative goodwill.