On Sep­tem­ber 2, 2026, the Na­tion­al In­sur­ance Board of Trinidad and To­ba­go (NIBTT) bought an ad­di­tion­al 4,430,161 of the is­sued share cap­i­tal of Re­pub­lic Fi­nan­cial Hold­ings Ltd. The share price of RFHL closed at $110 on Sep­tem­ber 1, which means NIBTT would have paid in the re­gion of $487,317,710 ($487.31 mil­lion) for the shares when the trade took place on Sep­tem­ber 2.

The sell­er of the RFHL shares was al­most cer­tain­ly Cor­po­ra­tion Sole (Min­is­ter of Fi­nance, Dav­en­dranath Tan­coo) be­cause RFHL’s 2025 an­nu­al re­port lists Cor­po­ra­tion Sole as own­ing 4,430,161 shares in the fi­nan­cial hold­ing com­pa­ny, which is the ex­act num­ber of shares NIBTT pur­chased last Wednes­day.

It is al­most cer­tain that the RFHL shares were trad­ed as a put through, which means trad­ing shares of lo­cal­ly list­ed com­pa­nies, which is “in­tend­ed to be a pri­vate­ly ne­go­ti­at­ed con­tract, not sub­ject to nor­mal trad­ing pro­ce­dures,” ac­cord­ing to rule 210 of the TTSE’s Rules.

That means the trade of the block of RFHL shares was ne­go­ti­at­ed di­rect­ly off the open mar­ket floor of the TTSE and then “put through” the ex­change sys­tem to be for­mal­ly reg­is­tered, cleared and set­tled.

Rule 210 fa­cil­i­tates three cat­e­gories of put throughs: be­tween as­so­ci­at­ed clients; in­volv­ing the Gov­ern­ment and for spe­cial cas­es.

On the is­sue of Gov­ern­ment put throughs, the rules “per­mit the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go and gov­ern­ment-re­lat­ed En­ti­ties (as de­fined in the Rules) to ef­fec­tu­ate se­cu­ri­ties trans­fers on a pre-de­ter­mined ba­sis, for di­vest­ment or re­struc­tur­ing, util­is­ing the fa­cil­i­ties of a stock ex­change.”

It is al­so known that the trans­ac­tion did not take place across the floor of the TTSE be­cause on Sep­tem­ber 2, a to­tal of 3,500 RFHL shares were trad­ed there.

The rules al­so stip­u­late that all put-through trans­ac­tions that have an ag­gre­gare val­ue of $25 mil­lion or more “shall be sub­mit­ted for the con­sid­er­a­tion of the board” of the TTSE.

What does the trans­ac­tion mean?

In its no­tice on the trans­ac­tion, which was pub­lished as a news re­lease on Sep­tem­ber 5, NIBTT said that as at Sep­tem­ber 1, it held 30,811,955 RFHL shares (18.80 per cent) and that, as a re­sult of its ac­qui­si­tion of more of the re­gion­al fi­nan­cial in­sti­tu­tion’s shares on Sep­tem­ber 2, it now holds a to­tal of 35,242,116 shares of its shares, equal to 21.50 per cent.

By ac­quir­ing an ad­di­tion­al 4,430,161 shares in RFHL, tak­ing the NIBTT above 20 per cent share­hold­ing in the re­gion’s largest fi­nan­cial in­sti­tu­tion by mar­ket cap­i­tal­i­sa­tion, T&T’s so­cial se­cu­ri­ty provider crossed a thresh­old, which trig­gers a le­gal pre­sump­tion of “sig­nif­i­cant in­flu­ence.”

That means NIBTT will ac­count for its share­hold­ing in RFHL as an as­so­ciate. It al­so means, I am told, that NIBTT must switch from fair val­ue ac­count­ing to the eq­ui­ty method of ac­count­ing.

Eq­ui­ty ac­count­ing means that NIBTT will be able to re­port 21.50 per cent of RFHL’s prof­it at­trib­ut­able to its share­hold­ers on the so­cial se­cu­ri­ty provider’s in­come state­ment as “share of prof­it of as­so­ci­at­ed com­pa­nies.”

There­fore, for ex­am­ple, if RFHL de­clares $2.5 bil­lion in af­ter-tax prof­it at­trib­ut­able to its share­hold­ers for its 2027 fi­nan­cial year, which ends on Sep­tem­ber 30, 2027, NIBTT’s in­come state­ment would get a $537.5 mil­lion boost.

And, if RFHL re­peats the to­tal $6 per share div­i­dend for its 2027 fi­nan­cial that it paid out in 2025, NIBTT will re­ceive $211,452,696 ($211.45 mil­lion) in cash div­i­dends from its share­hold­ing in the fi­nan­cial com­pa­ny.

I am told NIBTT would, in that case, re­ceive the cash, but would not be able to record any of that div­i­dend as in­come be­cause the pay­out by the bank re­duces the record­ed book val­ue of the RFHL as­set. That is be­cause NIBTT would have record­ed its share of RFHL’s prof­it ($537.5 mil­lion) al­ready in its in­come state­ment.

Giv­en the above men­tioned as­sump­tions, my un­der­stand is that the net ben­e­fit to NIBTT’s in­come state­ment would be $326.05 mil­lion, which is $537.5 mil­lion - $211.45 mil­lion, in 2027.

Is the pur­chase pru­dent?

The ac­qui­si­tion of an ad­di­tion­al 4,430,161 RFHL shares for about $487 mil­lion would ben­e­fit NIBTT—and the tens of thou­sands of T&T na­tion­als who re­ceive pen­sions and oth­er ben­e­fits from the fi­nan­cial in­sti­tu­tion—if the re­gion­al bank con­tin­ues to be more prof­itable every year and it con­tin­ues to pay out ever-in­creas­ing div­i­dends.

But if RFHL were to be less prof­itable in the fu­ture, and as a re­sult it paid out less div­i­dends, the pic­ture would look dra­mat­i­cal­ly dif­fer­ent.

In pre­sent­ing the 2026 bud­get on Oc­to­ber 13, 2025, the Min­is­ter of Fi­nance, Dav­en­dranath Tan­coo said, “Since 2020, ben­e­fit pay-outs have con­sis­tent­ly ex­ceed­ed con­tri­bu­tions, forc­ing the NIB to liq­ui­date its as­sets to meet oblig­a­tions.”

But Mr Tan­coo is wrong that since 2020 NIBTT’s ben­e­fit pay­ments have ex­ceed­ed its con­tri­bu­tions. In its own re­ports, in­clud­ing the most re­cent an­nu­al re­port on its op­er­a­tions as at June 30, 2025, the NIB states that ben­e­fit ex­pen­di­ture has con­sis­tent­ly sur­passed con­tri­bu­tion in­come since fi­nan­cial year 2013.

But Mr Tan­coo is right that the con­sis­tent deficit be­tween what the NIBTT spends and what it re­ceives has forced the fi­nan­cial in­sti­tu­tion “to liq­ui­date its as­sets to meet oblig­a­tions.”

In its re­port for its 2025 fi­nan­cial year, the in­sti­tu­tion said:

“The NIBTT’s in­vest­ment port­fo­lio as at June 30, 2025, was val­ued at $26.08 bil­lion, rep­re­sent­ing a $0.94 bil­lion or 3.46 per cent de­cline when com­pared to the cor­re­spond­ing pe­ri­od at the end of the 2024 fi­nan­cial year. The de­cline in the port­fo­lio’s mar­ket val­ue was main­ly at­trib­ut­able to ap­prox­i­mate­ly $246.14 mil­lion in un­re­alised loss­es as well as the with­draw­al of $1.93 bil­lion to fi­nance the Na­tion­al In­sur­ance Sys­tem deficit dur­ing the fi­nan­cial year.

“Meet­ing the liq­uid­i­ty de­mands of the Na­tion­al In­sur­ance (NI) Sys­tem re­mained a top pri­or­i­ty for the NIBTT. In the 2025 fi­nan­cial year, with­drawals reached $1.93 bil­lion—a min­i­mal de­cline of 1.53 per cent com­pared to $1.96 bil­lion the pre­vi­ous year.

“This grow­ing de­mand for liq­uid­i­ty posed chal­lenges to port­fo­lio growth, as ma­tu­ri­ties and in­vest­ment in­come were in­creas­ing­ly di­rect­ed to­ward fund­ing with­drawals. Ad­di­tion­al­ly, the height­ened liq­uid­i­ty pres­sures have led to more con­ser­v­a­tive port­fo­lio man­age­ment strate­gies.”

Ques­tions:

1) If, by its own reck­on­ing, “ma­tu­ri­ties and in­vest­ment in­come were in­creas­ing­ly di­rect­ed to­ward fund­ing with­drawals” from the NIBTT’s in­vest­ment port­fo­lio up to June 2025, has the in­sti­tu­tion’s fi­nan­cial po­si­tion in 2026 im­proved to such an ex­tent in 2026 that it could af­ford to spend near­ly $500 mil­lion to buy ad­di­tion­al shares in RFHL?

2) Is spend­ing near­ly $500 mil­lion to buy shares in a com­pa­ny, even a blue-chip com­pa­ny such as RFHL, a re­flec­tion of “more con­ser­v­a­tive port­fo­lio man­age­ment strate­gies?”

3) In his 2026 bud­get pre­sen­ta­tion, Mr Tan­coo an­nounced the im­ple­men­ta­tion of a 3 per cent in­crease in the con­tri­bu­tion rate ef­fec­tive Jan­u­ary 5, 2026, fol­lowed by an­oth­er 3 per cent in­crease from Jan­u­ary 4, 2027. To what ex­tent has that three per cent in­crease in con­tri­bu­tion rates at the be­gin­ning of 2026, from both em­ploy­ers and em­ploy­ees, im­proved the fi­nan­cial po­si­tion of NIBTT?

3) Both the NIBTT and RFHL are con­sid­ered sys­tem­i­cal­ly im­por­tant fi­nan­cial in­sti­tu­tions (SIFIs) by the Cen­tral Bank of Trinidad and To­ba­go (CBTT). The two are mon­i­tored by the Cen­tral Bank be­cause their dis­tress or fail­ure could trig­ger a wider do­mes­tic fi­nan­cial cri­sis. Is it pru­dent for one SIFI to own more than 20 per cent of an­oth­er SIFI in a small is­land econ­o­my?

4) Why did Cor­po­ra­tion Sole sell the 4,430,161 RFHL shares?