Campbell
MERGING THE operations of CIBC West Indies and Barclays will provide annualised gains of US$60 million, said, Raymond Campbell, country manager of FirstCaribbean International Bank (Jamaica) Limited.
FirstCaribbean was formed from the merger of CIBC and Barclays. Shareholders in FirstCaribbean International Bank (Jamaica), structured from the local CIBC operation, are now being offered the option to exchange their shares for those in FirstCaribbean.
"Annualised synergies are expected to be over US$60 million pre-tax per annum by the end of the third year of operation," Mr. Campbell told a press conference on Friday. These synergies will come from the restructuring of the institution and will mainly be derived from cost savings in FirstCaribbean.
Rationalising head office operations in Barbados, along with the rationalisation of the information technology infrastructure and other operational processes will provide the basis for the cost savings, Mr. Campbell said. Thus the separate Barclays and CIBC head offices which had been maintained in Barbados will be reduced to one.
NO PLANS TO CUT STAFF
"Since there are no Barclays operations in Jamaica, there are no corresponding opportunities available for FirstCaribbean (Jamaica)," he said at the company's New Kingston headquarters. There are no plans to cut staff in Jamaica, though there may be personnel changes.
Revenue enhancements will come from combining the Barclays and CIBC strengths to create new products and opportunities, he said. It will also come from combining the banks' strong franchises in corporate banking in the region, with extended customer base and distribution capability.
Integration costs of US$76 million will be incurred over the same three-year period, Mr. Campbell said. This involves costs to change brands, harmonise technology and the other costs involved in the merger.
FirstCaribbean is offering to acquire the outstanding public ownership in FirstCaribbean (Jamaica) by exchanging one common share in FirstCaribbean for every 7.5 ordinary shares in FirstCaribbean (Jamaica). The offer opened on March 31 and closes on May 9.
By offering FirstCaribbean (Jamaica) shareholders a 15 per cent premium at the proposed exchange ratio, Mr. Campbell said they are getting a good opportunity to participate in a bigger and stronger regional company.
