Jul 2014 Financial News

FGB aiming to double corporate banking share

Jul 25, 2014

First Global Bank (FGB), a subsidiary of the GraceKennedy Group, is moving to double its market share each year for the next two years within the promising corporate banking segment, Chief Executive Officer Maureen Hayden-Cater said on Thursday, noting that the bank is looking at companies with projects at launch stage.

"For 2015 and 2016, we estimate to double our current portfolio," she said, adding that corporate clients currently account for 50 per cent of all FGB loans.

The segment contributed more than 30 per cent to the bank's earnings in the last financial year.

As at March 31, 2014, the commercial bank had $15.98 billion in loans, representing just about 4.5 per cent of total loans within the the commercial banking sector. By Financial Gleaner's estimates, FGB's corporate banking portfolio is about $8 billion.

The GraceKennedy subsidiary is currently seeking a corporate banking manager to guide its new thrust. Within its sights are companies which want to grow and are seeking the wherewithal to do so strategically.

"The corporate market is not new. However, there remains tremendous opportunities for growth especially at a time where there are large strategic projects and other initiatives in Jamaica. In other words, these corporate companies have to continue to innovate to keep up with the changes in the external environment," Hayden-Cater said.

"We anticipate that these corporate companies will continue to innovate through mergers and acquisitions and organic expansion, in keeping with the changing domestic and international environment," she said.

GENERAL WEAKNESS

Hayden-Cater considers that a general weakness in the corporate loans segment in Jamaica was due to limited financial options available. FGB will compete in this market primarily through product customisation, she explained.

"We realise that clients in this market require unique structuring of their debts to match their cash flows. One size cannot fit all in this market. We have to treat each client differently according to their specific financial needs," said Hayden-Cater, who is also president of the Jamaica Bankers Association.

First Global Bank ranks fifth among the local commercial banking sector with total assets of $38.17 billion as at March 31, or five per cent of the total sector's assets.

Within the corporate banking segment, Hayden-Cater said she expects the main competition to be from the larger banks with "a bigger capital base and stronger brand resonance," adding that "a larger capital base is able to accommodate larger loans which are demanded by corporates."

She noted that while corporate banking services in Jamaica represent a mature market, it is nevertheless "one which has much further to go in terms of growth".

Source:
Avia Collinder, Business Reporter
avia.collinder@gleanerjm.com
Jamaica Gleaner
Friday July 25, 2014

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