The Kingston, Ja­maica head­quar­tered NCB Fi­nan­cial Group (NCBFG) on Fri­day an­nounced that its Ad­di­tion­al Pub­lic Of­fer­ing (APO) of shares in the com­pa­ny raised 50 per cent of its tar­get­ed J$5 bil­lion (US$32 mil­lion), even though the close of of­fer­ing was ex­tend­ed by one week "in re­sponse to re­quests by po­ten­tial in­vestors for ad­di­tion­al time," the com­pa­ny said.

NCBFG is chaired and was found­ed by Ja­maican-Cana­di­an in­vestor, Michael Lee-Chin, who re­mains the com­pa­ny's largest sin­gle share­hold­er. The group is the ma­jor­i­ty share­hold­er of Guardian Hold­ings Ltd, the West­moor­ings-based in­sur­ance com­pa­ny. NCBFG is list­ed on both the Ja­maica and T&T Stock Ex­changes.

In a news re­lease post­ed to its web­site on Fri­day evening, NCBFG said the com­pa­ny suc­cess­ful­ly re­ceived ap­pli­ca­tions for $2.5 bil­lion in its re­cent­ly com­plet­ed APO." The of­fer­ing was orig­i­nal­ly to close on May 27, but was ex­tend­ed to June 4.

"While NCBFG sought to raise ap­prox­i­mate­ly J$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," said NCBFG in the news re­lease.

Ja­maica's cen­tral bank, the Bank of Ja­maica, has raised its pol­i­cy in­ter­est rate from 2.50 per cent in Jan­u­ary 2022 to the cur­rent rate of 7 per cent, in or­der to sup­press in­fla­tion and lim­it the de­pre­ci­a­tion of the Ja­maican dol­lar.

CEO of NCBFG, Robert Almei­da, in the news re­lease, is quot­ed as say­ing, "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 to 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 de­clared net prof­it at­trib­ut­able to the share­hold­ers of the com­pa­ny of J$3.07 bil­lion in the first quar­ter of its 2024 fi­nan­cial year and J$8.65 bil­lion in the sec­ond quar­ter.

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

The com­pa­ny said over the past sev­en months, it elim­i­nat­ed J$8 bil­lion in re­cur­rent an­nu­al ex­pens­es, re­al­lo­cat­ed J$15 bil­lion 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.

Com­ment­ing on the per­for­mance of the APO, An­gus Young, CEO of lead bro­ker and arranger, NCB Cap­i­tal Mar­kets (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."