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NCB Fi­nan­cial Group Ltd (NCBFG) failed to de­clare a div­i­dend for its first quar­ter that end­ed De­cem­ber 31, 2024, de­spite in­di­cat­ing that it would hold a spe­cial board meet­ing dur­ing its sec­ond quar­ter, which end­ed on March 31, 2025, to con­sid­er the div­i­dend pay­ment.

That marked the first time in five quar­ters that the re­gion­al fi­nan­cial in­sti­tu­tion based in Kingston Ja­maica, has not paid a div­i­dend, break­ing a streak that be­gan in 2023. That fol­lowed a com­mit­ment by Michael Lee-Chin, the NCBFG chair­man, founder and its largest sin­gle share­hold­er, in Ju­ly of that year to re­store reg­u­lar share­hold­er pay­outs.

NCBFG’s board held a meet­ing on Feb­ru­ary 12 to con­sid­er the first quar­ter div­i­dend, but in­di­cat­ed in its quar­ter­ly re­lease that it would re­turn to the is­sue at a spe­cial meet­ing, which was sup­posed to be lat­er in the sec­ond quar­ter, end­ed March 31. NCBFG pro­vid­ed no up­date on that spe­cial meet­ing.

NCBFG did not pay the div­i­dend for its first quar­ter, de­spite the fact that its af­ter-tax prof­it of J$5.14 bil­lion for the quar­ter end­ed De­cem­ber 31, 2024, was 73.3 per cent more than its prof­it for the same quar­ter in 2023 of J$2.97 bil­lion.

Since De­cem­ber 2023, NCBFG has paid J$2.50 per share in div­i­dends—amount­ing to over J$6.12 bil­lion (US$38.6 mil­lion). Ap­prox­i­mate­ly US$18.5 mil­lion went to AIC (Bar­ba­dos) Ltd, Lee-Chin’s com­pa­ny, through which he owns most of his stake in NCBFG. The div­i­dend pay­ments helped him man­age his per­son­al af­fairs while sig­nalling re­newed con­fi­dence in the group’s di­rec­tion to in­vestors.

Be­tween April 2020 and April 2021, NCBFG paused div­i­dend pay­ments due to re­stric­tions im­posed by the Bank of Ja­maica. Fol­low­ing the lift­ing of those re­stric­tions, a mod­est J$0.50 per share div­i­dend was paid in May 2021. How­ev­er, div­i­dend pay­ments went on an­oth­er hia­tus for an­oth­er two and a half years un­til their rein­tro­duc­tion in De­cem­ber 2023, un­der Lee-Chin’s re­newed fo­cus on cash re­turns to share­hold­ers.

The lack of an up­date on why the NCBFG board did not re­con­vene to con­sid­er the div­i­dend is no­table, es­pe­cial­ly as the stock hit a 10-year low of J$40.10 last month. Since Ju­ly 2023, the share price has de­clined by about 31 per cent to J$45 from J$65. That date is im­por­tant be­cause it was when Lee-Chin re­turned from a leave of ab­sence, which was fol­lowed a few months lat­er by his push to im­ple­ment the group’s Ef­fi­cien­cy, Gov­er­nance, and Cus­tomer Ex­pe­ri­ence (EGC) strat­e­gy. NCBFG trad­ed slight­ly high­er at TT$2.34 (J$53.66) a share on Tues­day on the Trinidad and To­ba­go Stock Ex­change.

The ab­sence of a div­i­dend rais­es ques­tions about whether AIC Bar­ba­dos might of­fload more shares to raise cap­i­tal. In Oc­to­ber, AIC sold 9 mil­lion shares for J$470 mil­lion (US$2.95 mil­lion). NCBFG has since dis­closed that a con­nect­ed par­ty sold an ad­di­tion­al J$509 mil­lion (US$3.26 mil­lion) worth of shares be­tween Jan­u­ary 30 and March 7 on the Ja­maica Stock Ex­change. It was re­vealed on Mon­day that a con­nect­ed par­ty sold NCBFG shares worth J$570 mil­lion (US$3.65 mil­lion) on April 3.

The group has ear­marked May 8, Au­gust 7, and No­vem­ber 13 as up­com­ing board meet­ings where div­i­dends could again be con­sid­ered. NCBFG’s abil­i­ty to de­clare div­i­dends at these sub­se­quent meet­ings is based on the im­ple­men­ta­tion of Basel III and changes to bank­ing reg­u­la­tions that can af­fect cap­i­tal re­quire­ments at the Ja­maican bank. On­go­ing mar­ket volatil­i­ty may al­so im­pact NCB Cap­i­tal Mar­kets Ltd—wide­ly viewed as the group’s crown jew­el.

Re­fi­nanc­ing strat­e­gy un­der­way

NCBFG is ac­tive­ly re­duc­ing its debt load at the hold­ing com­pa­ny lev­el and across the group to man­age in­ter­est costs. At the com­pa­ny’s an­nu­al meet­ing in Feb­ru­ary, Group CEO Robert Almei­da shared that to­tal debt was re­duced by 10 per cent, sup­port­ed by ef­forts to di­ver­si­fy fund­ing and dis­pose of non-core as­sets. NCBFG ex­e­cut­ed an ad­di­tion­al pub­lic of­fer­ing (APO) on the Ja­maica Stock Ex­change in April 2024, but was on­ly able to raise a net amount J$2.41 bil­lion com­pared to its J$5.10 bil­lion tar­get. Those funds went to re­duce the hold­ing com­pa­ny’s debt.

The group re­cent­ly re­fi­nanced a J$15 bil­lion bond—orig­i­nal­ly is­sued in 2021 at 6 per cent—at a sig­nif­i­cant­ly high­er rate rang­ing from 11.50 per cent to 12.50 per cent in Sep­tem­ber 2024. Last month, an ad­di­tion­al J$10 bil­lion in debt was re­fi­nanced, com­pris­ing J$7 bil­lion (US$4.87 mil­lion) in Ja­maican dol­lars and US$19.5 mil­lion in US dol­lars. These new bor­row­ing costs—above 10 per cent in Ja­maican dol­lars and 8.25 per cent in US dol­lars—may lim­it the abil­i­ty of NCB’s bank­ing arm to re­duce lend­ing rates in the short term due to high­er fund­ing costs at NCBFG.

NCBFG is al­so in the process of fi­nal­is­ing the sale of its 30.2 per cent stake in Clar­ien Group to Cor­ner­stone Fi­nan­cial Hold­ings Ltd (CFHL), which is sub­ject to reg­u­la­to­ry ap­proval. CFHL re­cent­ly re­struc­tured its op­er­a­tions, trans­fer­ring di­rect hold­ings in Bari­ta In­vest­ments and Cor­ner­stone Trust & Mer­chant Bank to a new en­ti­ty, Bari­ta Fi­nan­cial Group Ltd (BFG), which is ex­pect­ed to be li­censed by the Bank of Ja­maica as a fi­nan­cial hold­ing com­pa­ny.

While the sale price of the Clar­ien stake re­mains undis­closed, the pro­ceeds could help re­duce NCBFG’s re­port­ed J$90.72 bil­lion debt, J$62.99 bil­lion (US$400 mil­lion) of which was list­ed as cur­rent in its lat­est au­dit­ed fi­nan­cials.

De­layed fi­nan­cials from GHL

NCBFG’s missed div­i­dend co­in­cid­ed with a de­lay in the au­dit­ed fi­nan­cial state­ments of its 61.77 per cent con­trolled sub­sidiary, Guardian Hold­ings Ld (GHL). The West­moor­ings-based hold­ing com­pa­ny of the Guardian Group an­nounced on March 28 that it would be un­able to pub­lish its au­dit­ed fi­nan­cial state­ments for the year end­ed De­cem­ber 31, 2024, by the statu­to­ry dead­line of March 31, 2025.

“We apol­o­gise for the de­lay and fur­ther ad­vise stake­hold­ers that the fi­nan­cial state­ments will be pub­lished on or be­fore April 11, 2025,” said the GHL cor­po­rate sec­re­tary, Krys­tal Baynes-Ho­sei­nee. The de­lay is due to an on­go­ing au­dit of one of GHL’s prin­ci­pal sub­sidiaries, said the group.

On Wednes­day, GHL pub­lished the group's au­dit­ed fi­nan­cial state­ment for its fi­nan­cial year end­ed De­cem­ber 31, 2024.

Based on NCBFG’s first-quar­ter per­for­mance, GHL ap­pears to have post­ed im­proved re­sults in the fourth quar­ter. The gen­er­al in­sur­ance seg­ment saw an 18 per cent rise in op­er­at­ing prof­it to J$2.2 bil­lion, while the life, health in­sur­ance, and pen­sion seg­ments rose 28 per cent to J$7.96 bil­lion. Ad­di­tion­al­ly, GHL com­plet­ed the sale of Dutch in­sur­ance bro­ker­age Thoma Ex­ploitatie B.V. in Jan­u­ary, gen­er­at­ing a gain on the trans­ac­tion, which has not been dis­closed to the mar­ket.