The board of directors of the NCB Financial Group (NCBFG) yesterday approved an interim dividend of J$0.50 per ordinary share, fulfilling a commitment made by Michael Lee-Chin, the executive chairman of the Kingston, Jamaica-headquartered financial institution, to resume the payments.
The dividend, in TT dollars, is equal to $0.022. NCBFG closed at $3.20 yesterday on the local stock market, which means the interim dividend of $0.022 is equal to a dividend yield of less than 1 per cent. The dividend is payable on December 18, 2023, to shareholders on record as at December 4, 2023.
Lee-Chin held 1,467,645,135 NCBFG shares as at the end of June 2023, according to the financial holding company’s unaudited financial results for the nine months ended June 30, 2023. With a dividend of J$0.50 a share, the NCBFG chairman is expected to receive a payout of J$733.82 million, which is equal to about US$4.70 million.
The last time NCBFG declared a dividend was at a meeting of its board of directors on April 29, 2021. That was an interim dividend of $0.50 per share, which was payable on May 31, 2021 to shareholders on record as at May 14, 2021.
NCBFG’s non payment of dividends since May 2021 contributed to the disruption in the upper echelons of NCBFG earlier this year.
On July 18, 2023, the group announced that effective that day, its Group CEO and deputy CEO, Patrick Hylton and Dennis Cohen were proceeding on vacation leave for three weeks.
In an interview with the Jamaica Observer that was published on July 14, Lee-Chin said of the group’s failure to pay a dividend since May 2021: “Firstly, I’m not happy. I am definitely not happy. And I am not just speaking for myself. I am speaking for all shareholders, including the pensioners. Certainly, we all depend on the income from dividends...I am not happy because I have had to be selling assets to meet my expenses.”
Although he complained about NCBFG not paying a dividend, Lee-Chin was chairman of NCB Jamaica when he acquired the bank in 2002. Lee-Chin, who is the largest shareholder of the company with about 60 per cent of its issued share capital, has also been chairman of NCBFG since its incorporation in April 2016.
As chairman and as NCBFG’s largest shareholder, it is likely Lee-Chin would have had to agree to the non payment of dividends from May 2021.
Last Monday, NCBFG announced that Hylton and Cohen had resigned as officers and directors of the holding company and its subsidiaries, based on agreements reached with them.
“The related separation arrangements include cash payments and arrangements for the allotment of shares, and the costs will have a material impact on the performance of the company, primarily in the fourth quarter of the 2023 financial year ended September 30, 2023,” said NCBFG.
In a WhatsApp voice note issued yesterday morning, Lee-Chin said he was “so excited” because he had just chaired “the shortest and most important board meeting ever, I am sure, in the history of NCB.”
He said the board meeting yesterday was the shortest because it lasted less than five minutes.
“Important because we approved the dividend this morning, having not paid a dividend for three years,” said Lee-Chin.
He said over the last three years, all of Jamaica was affected by the failure of NCBFG to pay a dividend.
“Pensioners, pension funds, customers regulators, government, our lenders, the press, staff and shareholders. And you all told us, in your singular voice, that it is a reminder of the importance of NCB to Jamaica. It is the people’s bank,” said Lee-Chin.
NCBFG trades on both the Trinidad and Tobago Stock Exchange and the Jamaica Stock Exchange. The financial holding company has a merchant bank licence in T&T as well as a brokerage licence and owns about 60 per cent of Guardian Holdings Ltd.
Lee-Chin added: “This approval (to pay the dividend) is a commitment to all our stakeholders that– notwithstanding Basel III, notwithstanding IFRS17, notwithstanding high interest rates and high inflation – dividends have to be paid.” He said NCBFG has accepted the responsibility to pay dividends.