May 14, 2009 0
Review – Capital & Credit Financial Group Ltd. AGM
Capital & Credit Financial Group Ltd (CCFG) hosted its first Annual General Meeting at the Knutsford Court Hotel yesterday. Mrs Rosalie Deane, Senior Vice President, Business Strategy & Development opened the meeting with a prayer. Then, Mr Audley Gordon of Deloite & Touche read the independent auditor’s report.
The Group President & CEO, Mr Ryland T Campbell outlined the 2008 results and said that although the Company was not completely insulated from the most recent financial crisis, it was not protected from the crisis in the 1990’s either, but it pulled through regardless. He also said that the Company is currently the best capitalized merchant bank on the island and has grown into a leaner, more efficient organization. He said CCFG is still young and described it as being in its “teenage years” which presents its own set of challenges. He also noted that is has been one year since the Group listed on the Jamaica Stock Exchange and Trinidad & Tobago Stock Exchange.
Then, Mr. Curtis Martin, Deputy Group President, Banking and Investment Services & CEO, Capital & Credit Merchant Bank (CCMB) outlined the Group’s performance in banking. He said that higher interest income and a foreign exchange gain during the year offset trading losses, so the Company was able to earn a profit. He said that the Group’s Efficiency Ratio as at the 2008 results deteriorated as a result of the slip in gains from securities trading, but the Company is looking to expand in other areas, like foreign exchange and control costs (especially the cost and productivity of staff which is being addressed) in order to improve the ratio.
Campbell said that the Group did not anticipate the economic conditions in 2008, especially the further deterioration towards the end of the year. As a result, it was necessary to re‐evaluate the business and the decision that resulted were the layoffs announced earlier this year. He described CCFG as “the only serious stand‐alone Group with a bank” and he commended the team for building the organization from scratch. He said that unlike many other institutions, CCFG does not have a foreign or more‐established, related Company to rely on. He added that it is commonplace for institutions and individuals to look down on or criticize indigenous Companies built up by Jamaicans like CCFG. He said that this is a practice that he would like to see come to an end.
In response to a question about the bank’s provision for credit losses and fair value reserve, Martin responded that 99% of the Company’s investment portfolio comprises GOJ securities – not toxic assets. The decline in the market value of these securities is reflected in the Company’s financial statements, but he is confident that CCFG will recoup its investment at maturity.
Mr Martin said that early in the year (2008), the Company dumped its portfolio of low‐yielding assets at par value. He said that it did not see any significant losses from this strategic decision.
The Group President & CEO commended the Group on its 59‐year record of earning profits and said he expects the Company to post its 60th when first‐quarter 2009 (Q01 2009) results are posted later this week.
Mr Andrew Cocking, Deputy Group President, International Business and CEO, Capital & Credit Remittance Ltd then made his presentation. Beginning with the remittance business, Mr Cocking said that there was a downturn in the 2008 results. The Company made 100k transactions during the period and saw a decline in revenues.
For 2009, he said that the Company will focus on driving revenues and executing more outbound transfers. He also said the Company is offering transfers through the credit unions as they present a great opportunity because of their large customer base. He also said that cost containment would be a top priority going forward.
The Company will market its Reggae Money Express brand in niche markets (US, UK) with the help of Jamaican entertainer Oliver Samuels. It is also seeking a partner in Canada to expand its remittance business there.
Cocking then spoke about Capital & Credit International Inc (CCII) which will launch several new services this year. The Company will offer access to online trading platforms to its clients. It will also allow customers access to online bill payment and US chequing accounts and debit cards. Such accounts will be US Government‐backed. He also said that funds will not be physically held by CCII, as the Company acts as a dealer or broker in the transaction. The funds (minimum of USD 1,500) will be held by Pershing LLC.
Before closing the meeting a vote was taken and all Board Members up for re‐election were re‐elected. The payment of fees of JMD 3.655mm to Non‐Executive Directors was approved and the auditors, Deloitte & Touche were re‐appointed.
Board members added that despite challenges, management expects to run a profitable, safe and secure organization in the long‐run.