Jun 2008 Financial News

Guess who is Jamaica's biggest banker?

Jun 27, 2008

Michael Lee Chin overtakes Scotiabank as Canadian banks jostle for piece of Caribbean market.

It is a familiar picture: a bunch of big Canadian banks jostle for top spot in the local banking sector, a market effectively carved up by a handful of big players.

But the market is Jamaica, not Canada, and the new number one bank in the island is Canadian-owned, but it is certainly not a household name here.

According to data from Jamaica's central bank, the country's new market leader is National Commercial Bank, a subsidiary of AIC Limited, the Canadian mutual fund company owned by billionaire investor Michael Lee Chin.
Lee Chin's bank, AIC, bought 75 per cent of it in 2002 -overtook Bank of Nova Scotia to become the biggest bank in Jamaica by net assets during the first quarter of 2008, the central bank's data shows.

The two banks are more or less neck-and-neck in terms of net assets as of March 31 this year. The Jamaican unit of Scotiabank, which has extensive operations throughout the Caribbean, has net assets of about J$19 billion (Cdn$275 million) compared with about J$20.7-billion (Cdn$296-million) at NCB.

The next two largest banks are First Caribbean International Bank, which is a subsidiary of Canadian Imperial Bank of Commerce, and Royal Bank of Trinidad and Tobago, which was bought by Royal Bank of Canada in March for US$2.2 billion.

Last month, NCB's group managing director Patrick Hylton said the bank had made strides by focusing on customer service and innovation in marketing and back office functions. The bank reported that profit for the quarter ended March 31, 2008, grew 64 per cent to J$2.6 billion Jamaican (Cdn$37 million).

Scotiabank's Jamaican operations also saw profits jump sharply in the most recent quarter, up 40 per cent from last year to J$2.5 billion (Cdn$36 million). Bill Clarke, head of the local Scotiabank unit, said the bank enjoyed solid growth across all business lines and strong demand for loans from retail customers.

Scotiabank has long had a successful business in the Caribbean. Canada's self-styled most international bank has 200 branches in the region. Scotiabank has had a presence in Jamaica since 1889, and now operates 38 branches across the country.

But the bank's executives are likely bracing for more competition since Canadian rivals recently bulked up in the region. In addition to Lee Chin's acquisition of 45-branch NCB five years ago, RBC's purchase of RBTT means it now has 130 branches across the Caribbean up from 46 before the deal which was announced last year.

In late 2006, CIBC also upped its investment in the Caribbean, taking up the $1-billion option to buy out Barclays PLC, the British bank that had been its partner in First Caribbean International Bank since 2002. CIBC now owns more than 90 per cent of Barbados-based FCIB which has more than 100 branches.

Jamaica Observer
Website: http://www.jamaicaobserver.com/magazines/Business/html/20080626T230000-0500_137175_OBS_GUESS_WHO_IS_JAMAICA_S_BIGGEST_BANKER_.asp
June 27, 2008