Sep 2006 Financial News

Capital & Credit Merchant Bank eases layoff fears

Sep 22, 2006

Capital & Credit Merchant Bank (CCMB) has not ruled out the possibility of layoffs after it implements new technology to improve efficiency in its back office and client relations operations. However, the company has made it clear that any such move would not be immediate or widespread.

"I can't tell you that one or two jobs won't be reassigned," Michelle Wilson Reynolds, vice-president of marketing & corporate affairs, told Caribbean Business Report. "We don't know what the technology will reveal. but we don't anticipate widespread layoffs. The last resort is to layoff staff. Our goal is to keep everybody."

The company, Wilson Reynolds said, has put a freeze on hiring. "Any vacancies we have will be filled from within," she said. "We can promote from within, as we are training and multi-skilling our staff to use them more efficiently."

CCMB's move to improve efficiency comes against the background of a decrease in its non-interest expenses for the six-month period ended June 30, 2006, which stood at $422.4 million compared to $492.6 million in the comparative period last year.

"This 16 per cent decrease is primarily attributable to a reduction of staff costs," the financial statement said. In previous company releases, Ryland Campbell, chairman and chief executive officer of the Capital & Credit Financial Group, said that the investment in technology was "not only to improve efficiency, but also the Group's capability".

Speaking last month, he said that improvement should take place, "particularly in respect of customer service and access; product origination and competitiveness; as well as improved corporate reporting, planning and research".
In its battle with declining spreads from money market instruments, CCMB has turned to its loan portfolio to achieve growth. There have been some successes with this strategy. Loans at the end of the second quarter ended June 2006 stood at J$3.38 billion, a 35 per cent increase over the comparative quarter in 2005.
However, the company has not completely escaped the pressures of shrinking margins. For the period ended June 30, 2006, net profit after tax stood at approximately J$132 million, compared to just under J$394 million earned in the same period in 2005. The company, in its financial statements, said, "this is primarily due to the reduction in trading gains during the period, from J$400 million in the comparative quarter, to approximately J$80 million in the current quarter".


Source:

Dennise Williams
The Jamaica Observer
Friday 22nd September, 2006


http://www.jamaicaobserver.com/magazines/Business/html/20060921T220000-0500_113174_OBS_CAPITAL___CREDIT_MERCHANT_BANK_EASES_LAYOFF_FEARS_.asp