Oct 2016 Financial News

BOJ gives green light for NCB restructuring

Oct 28, 2016

On October 26 the National Commercial Bank Jamaica Ltd (NCBJ) notified the market that it had received a “no objection” response from the Bank of Jamaica to planned restructuring.

“The Bank of Jamaica has indicated that it has no objection to NCBJ`s proposal to pursue a corporate restructuring activity under which NCB Financial Group Limited would become the financial holding company of NCBJ and its subsidiaries,” the notice published on the Jamaica Stock Exchange (JSE) read.

NCBJ said it will be proceeding with this activity which will require additional approvals in the coming months, notably the approval of its shareholders and the Supreme Court.

The group’s subsidiaries and affiliates include banking, insurance, capital markets companies and more.

NCBJ mooted the planned overhaul from as far back as 2013, stating then that current shareholders will be asked to swap their shares for new shares in the holding company when all legalities are fulfilled.

In April 2016, NCB Financial Group Ltd (NCBFG) was incorporated with NCBJ saying then it would be the holding company both for subsidiaries, as well as future acquisitions.

Its latest purchase was made in November 2015, when it entered an Agreement with the Lok Jack Family, the Ahamad Family and the IFC to purchase a 29.99 per cent interest in Guardian Holdings Limited (GHL).

NCBJ has said that transfer of ownership in Guardian awaits the restructuring process.

The company stated in August, “At the time the Agreement was signed, the structure of the transaction was not yet decided. However, the Agreement always contemplated that NCBJ might appoint a nominee to purchase the GHL shares.”

GHL shares were acquired by NCBJ’s nominee and affiliate, NCBFG, for $28 billion.

The group indicated that all affiliates and subsidiaries will be held under the new holding company when the restructuring sought has been approved and executed.

In seeking to restructure, NCBJ will be following in the footsteps of other local financial groups, which, under a requirement of the new Banking Services Act, must restructure their operations.

The BOJ set the requirement in order to facilitate easier supervision of their businesses.

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Jamaica Observer
Friday October 28, 2016 

http://www.jamaicaobserver.com/business/BOJ-gives-green-light-for-NCB-restructuring_78537