Nov 2016 Financial News

First Global Bank to open in Portmore. GK to roll out banking services through money services network

Nov 18, 2016

CEO of GraceKennedy Limited (GK) Don Wehby indicates that the group will be leveraging its money services network – comprising 150 locations islandwide — to roll out services from its First Global Bank (FGB) financial arm, making use of new agent banking regulations.

“We are pleased that the Banking Services (Deposit Taking Institutions) (Agent Banking) Regulation has been approved, as it will allow us to execute a key strategic initiative — that is reaching the unbanked. GraceKennedy’s breadth, experience and financial services network will allow us to serve customers effectively across the island. First Global Bank’s services will be delivered through the GraceKennedy Money Services network,” Wehby told the Jamaica Observer.

Additionally, he said Hi-Lo locations will be used to deliver an integrated retail strategy to customers who use both GK’s food and financial services. For example, First Global Bank branches are located at the Ligunea and Manor Park Hi-Lo food stores in Kingston.

On Monday, November 14, the CEO also disclosed at the company’s investor’s briefing that the Portmore branch of Hi-Lo is next on its list for an upgrade and will include a branch of FGB.

“Agency banking allows further access for more Jamaicans whose needs for financial services may not have been met by traditional banking. Some communities which are currently underserved because of the absence of a branch will find new opportunities for doing business as agencies become operational. A whole new way of providing and receiving financial services will open up that can lead to new business and employment opportunities,” Wehby explained to the Business Observer.

Agency banking for FGB is a primary growth strategy, followed by the roll-out of digital banking. US$7 million has been invested to date in new technology. Micro insurance, Wehby added, will be offered in the expanded network.

Wehby said First Global Bank’s build-out strategy for its video teller machines, multi-currency dispensers and intelligent deposit ATMs continue to be based on the needs of customers and the availability of preferred locations.

Mobile money, he said in Monday’s investor briefing, was awaiting approval by the Bank of Jamaica. The technology, he said, will offer bill payment services for at least 100 retail merchants in its first phase.

Profits for GK’s banking and investment arm fell 26 per cent in the third quarter ended September 30, 2016.

Contributing to this were costs associated with the acquisition of new technology and investments in the branch network.

A new branch location for First Global Liguanea was opened in September. However, revenue grew 30 per cent over the corresponding period of 2015, driven primarily by higher-interest income from a growing loan portfolio in First Global Bank.

Further news shared in Monday’s investor briefing is that GK has entered the Dominican Republic as a new market for its foods, and will be entering The Bahamas with money services. The company is also considering the start of manufacturing in Ghana where revenue has climbed 86 per cent.

GK has brought back manufacturing of Tropical Rhythms from the US to Jamaica, where growth in foods and manufacturing continues to outpace all other regional locations for the company.

Wehby said Monday that the company will also soon be opening GK Europe, with revenue up in that continent.

Performance in the US was also up, with growth in both the Grace Foods and La Fe brands. “Gains made in the market have seen our products being even better placed in prime retail outlets such as Walmart Stores, where we were able to acquire increased display space for both the Grace and La Fe brands,” Wehby said in a related release.

GK reported revenue of $66.7 billion for the nine months to September, up by 11.6 per cent over the corresponding period last year and net profit of $3.7 billion — a 54.6 per cent increase over 2015.

Best performer was foods, with Jamaicans buying more of the company’s traditional canned meats.

The earnings per stock unit from continuing operations as at September 30, 2016 was $3.34, while shareholders’ equity increased by $3.9 billion over the nine-month period to $42.0 billion, resulting in a book value per share of $42.35.

The company has to date paid out some $1 billion in dividends, with interim dividends of 42 cents per share which will be paid on December 9, 2016.

The company, which split its stock two ways earlier in the year, has seen price appreciation of just over 50 per cent.

 

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Jamaica Observer
Friday November 18, 2016     

http://www.jamaicaobserver.com/business/First-Global-Bank-to-open-in-Portmore_80559