NCB raises $2.5 billion in APO Loop Jamaica

The content originally appeared on: Jamaica News Loop News

NCB Financial Group Limited says it has received applications for $2.5 billion in its recently completed Additional Public Offering (APO).

While NCBFG sought to raise approximately $5 billion, the company considers the achievement significant within the context of the prevailing monetary policy environment and the challenges it poses for equity capital markets.

Robert Almeida, CEO of NCBFG, expressed both optimism and realism: “The APO proceeds are intended to reduce debt and strengthen capital flexibility at the financial holding company.  Our key operating businesses: National Commercial Bank, Guardian Insurance and Clarien Bank are all performing well and combined are contributing 30 – 40 per cent of consolidated earnings to the holding company.  At current run rates the shortfall in the raise should be generated from earnings over four to six months and is not expected to significantly impact our plans for the coming year.”

NCBFG’s APO is just one of several strategies the group is pursuing to recalibrate the business and position itself for future opportunities.

The company said it has, over the past seven months, eliminated $8 billion in recurrent annual expenses, reallocated $15B of surplus capital within the group and has divested its non-core banking business in the Cayman Islands, the sale of which is currently undergoing review by regulators.

The success of these initiatives is evidenced by the group’s financial results for the quarter ended March 31, 2024, where Consolidated Net Profit (attributable to stockholders of the parent) increased by 74 per cent year over year to $5.6 billion. 

Commenting on the performance of the APO, Angus Young, CEO of Lead Broker and Arranger, NCB Capital Markets Limited (NCBCM), noted “Participation in the APO was vibrant, with over 3,000 applications received. Of note, employees of NCBFG oversubscribed the employee reserve pool and these investors have an intimate understanding of the Group and its potential.”

“We are further encouraged by the overwhelming support from the broker community in Jamaica who participated as selling agents and shared their independent valuations of the company – all of which ascribed intrinsic valuations in the mid to high $70’s per share. This demonstrates strong market confidence in NCBFG’s strategic direction and future prospects.”

Meanwhile, group CEO Almeida thanked NCBCM, the broker community and investors participating in the APO for their support.

“As we look ahead, NCBFG is focused on continuing the disciplined execution of our strategies to leverage our asset base of $2.2 trillion and capitalise on our unrivalled scale across 21 countries and breadth of offerings, to create wealth for our clients, shareholders, and communities.  We thank all of our supporters for their continued confidence in us.”