By Dennise Williams, Staff ReporterCAPITAL & Credit Merchant Bank (CCMB) is buoyed by its United States investments and keen on local and regional expansion plans, the company revealed at its inaugural annual general meeting at the Jamaica Pegasus Hotel, New Kingston, yesterday.
In 2003, the year under review, the merchant bank and its subsidiaries namely Capital & Credit Remittance Limited and Capital & Credit Securities Limited was able to grow their net profit by 62 per cent from $287.41 million in 2002 to $465.27 million.
Despite the economic challenges of 2003, the overall picture of CCMB has been good. Curtis Martin, president and CEO, explained, "When you look at our 2003 profits, you would ask, 'Can we continue to do well?' The answer is yes. Our business mo-del is resilient and we will make profits in good times and in bad. We took the decision three years ago to diversify our income stream and this has paid off."
CAPITAL MARKET
With 50 to 60 per cent of their activities now in the international capital market, mainly U.S. Government securities, CCMB has a diversified income stream. Mr. Martin said this diversification, "significantly reduced our exposure to Jamaica."
To further diversify their income base, the bank has bid for the Jamaica Unit Trust and, according to Mr. Martin, "We are also looking for opportunities in the region."
Mr. Campbell elaborates: "If you are not talking about doing business in the Caribbean, you will be left behind. We will be looking at joint venture and business deals within the region. Our ambitions is to be more than just a Jamaican bank, we want to be international."
However, the bank will not leave Jamaica behind. One of the new initiatives that the bank has taken on is the improvement of its risk portfolio.
States Mr. Martin, "We are looking to recruit a chief risk officer who will enhance our risk management."
ABM THRUST
Mr. Campbell said, "We have applied to the relevant authorities for ABM card service. We are now waiting for approval. Also we are focusing more on our retail banking customers, as they are more loyal and so our staff has continued to develop its personal banking techniques. Additionally, we will be looking at opening another branch in the May Pen or Mandeville area. In conjunction with this, we will be looking at Internet banking to give our customers 24/7 banking access."
Besides their U.S. dollar holders, another profit driver was their initial public offering (IPO) of shares in Jamaica and Trinidad & Tobago. On May 26, 2003, the company became the first merchant bank listed on the Jamaica Stock Exchange (JSE). The share price, which started at $5.00 on that date, traded on May 25, 2004 for $19.00.
However, the Jamaican IPO was not without difficulties. Ryland T. Campbell, chairman and group president, explained. "Capital & Credit's Achilles heel was its IPO for listing of the bank's shares on the JSE in the face of deposit interest rates of 35 per cent and a rapidly devaluing dollar, which by then reached a peak of $72 to US$1."
