Letter of the Day | Mega-rich NCB should share profits
THE EDITOR, Sir:
National Commercial Bank (NCB) has, in a single quarter, recorded almost $6 billion in profits. That is just under a whopping $2 billion per month in profit (not gross revenues). With the company making this level of profit, one has to ask, how much is enough?
I know the NCB financial spinners will claim that we should not look on profits but how much the bank expended to earn that level of profit. In other words, what was the asset base? If that line of argument is attempted, I would hasten to remind the company that many of its buildings and other assets that form part of its asset were acquired at rock-bottom prices in some cases, and the market valuations on those buildings have now skyrocketed. It is, therefore, not fair to point to asset base in an attempt to argue that $6b is a small amount of profit, given the asset base.
So how much is enough? In a country where small savers suffer, where interest rates on savings are negligible; where fees account for 40 per cent of income; where interest rates on some products are as high as 48 per cent per annum; how can a bank be proud to make that kind of profit?
In a country in which many schools lack basic resources; hospitals operate without well-needed supplies; public-sector employees (many of whom save with the bank) have seen real wages fall and prices of all goods go up; how much can one expect a bank to do to contribute to national development when its profit from one quarter to another increases by 66 per cent?
Could the bank do more for its employees and customers by raising wages for the lower-level employees and lowering and removing fees for customers? Can we be told how much NCB has given back to the country over the last year?
Partnership requires transparency
NCB, as a local bank and possibly the most profitable company in the Caribbean, should be paying a lead role and being the lead sacrifice maker, among businesses, in the partnership for eliminating poverty and reducing financial inequity in Jamaica. One important element of this partnership is transparency. NCB, like other banks, needs to show us the real cost of their operations, the spread between the salaries of top executives and the rest of the employee body, and how much funds it repatriates and holds in banks overseas.
NCB should also be a bank that keeps its word. NCB, like other banks, told the country that by using ATMs, we would reduce banking costs. NCB, like other banks, has not kept its word. NCB needs to lead the way in keeping its word on this matter.
Management Consultant, Lecturer