Sep 2004 Financial News

Jamaica Unit Trust transfers to new owners come month-end

Sep 29, 2004

CAPITAL AND Credit Financial Group (CCFG) is expected to take control of the Jamaica Unit Trust Services Limited (JUT) by the end of the month, said Ryland Campbell, chairman of CCFG.

The Government of Jamaica (GoJ), through the Financial Institutions Services Limited (FIS), had placed its 93 per cent ownership of JUT on the auction block in February of this year. With about $1.3 billion under management, the JUT has three funds ­ the Income and Growth Fund, the Capital Growth Fund and the Giltedge Fund.

"We are waiting for the final documents to come through and that should take place in a couple of weeks," Mr. Campbell told Wednesday Business in an interview. "We should be in charge by the end of this month." Mr. Campbell said, "Part of the sale agreement was that we would not divulge details to the media before the final handover."

EXPANDING CUSTOMER BASE

Nonetheless, the general direction that CCFG will take with JUT has been hinted at over the past few months.

First CCFG gets an instantly expanded customer base. JUT will come with a dowry of 15,000 clients to add to Capital and Credit Merchant Bank's existing 2,000. Capital and Credit Financial Group consists of Capital and Credit Holdings Ltd. and Capital and Credit Merchant Bank Ltd. (CCMB).

Another attractive feature is the unutilised licence the JUT has to operate in the Cayman Islands. Andrew Cocking, deputy group president, Capital and Credit Holdings Limited in a previous interview said, "We would certainly look into taking advantage of that."

Last but not least is the diversification of its income base. Deputy group president/president and CEO of Capital and Credit Merchant Bank, Curtis Martin, explained recently that, "The purchase of JUT will provide risk diversification and increase our fee-based income."

It is reported that CCMB paid $200 million for the right to acquire JUT. Five years ago, in 1999, Dehring, Bunting and Golding paid $115 million for Eagle Unit Trust, a casualty of the financial sector meltdown in the mid-to-late 1990s.

Source: Jamaica - Gleaner