Winner: National Commercial Bank
Speed and risk. Two words that work well in movie titles, but are also the central components of the strategy Jamaica’s leading bank is implementing to grow its business.
The National Commercial Bank (NCB), the largest bank by assets and revenue on this island nation of 3 million people, suffered during the pandemic like financial institutions around the world, but instead of fretting, it decided to use the experience to stand apart.
“Leveraging technology has been at the core of our strategy. We need to be fast and flexible, and we have an obsession with risk. Speed and risk-management capacity are tools for competitive advantage,” says Septimus “Bob” Blake, CEO of NCB.
The bank’s strategy, its solid numbers, search for growth and continuous focus digitalization secured it the Bank of the Year award for Jamaica.
Total assets as of June 2021 were up by 11.0% compared to the previous 12 months. Deposits were up by 17.0% and loans by 13.0%. Non-performing loans were also up, coming in at 6.0% of gross loans. This is up one point from the previous year.
Blake says that Jamaica, his bank and the financial system are poised to recover because they went into the crisis at one of the best economic and fiscal moments in the past few decades.
Jamaica entered into an agreement with the International Monetary Fund (IMF) in 2016 to get a handle debt-GDP ratio, which had reached a high of 138% in 2013. It dropped to 93.5% in 2019 is expected to be a notch below 90% this year, a level not seen since the end of the 1990s.
GDP was also growing, but it contracted by 5.3% in 2020. It is pegged to grow at 3.9% this year, and average around 2% for the coming years.
“The choices we made as a country and as an industry in terms of fiscal discipline gave us options for the crisis,” says Blake.
Blake, who took over as CEO of the bank in 2019, said the bank had made a few choices during the pandemic that would play a major role in the bank going forward.
The bank is focusing heavily on small and medium enterprises (SMEs), the primary source of employment in the country, as well as agriculture. He said that agriculture has been long-overlooked, but Jamaica has the land and resources to produce food to meet local demand and, at the same time, lower the country’s import bill.
The overarching change, however, is technology, and Blake said the crisis actually unlocked the potential.
“There had been some inertia in terms of adopting digital opportunities. The one positive thing about the crisis is that it broke this inertia,” he says.
He says that while NCB had been investing in technology, it was simultaneously carryig traditional infrastructure. The bank had been spending to maintain existing legacy systems, which is no longer the case, he adds.
The newest challenge is a partnership with the Bank of Jamaica, the central bank, which is moving toward a national digital currency. NCB is the only bank involved, with Blake saying it is “an opporutity to drive innovation and competition. We have been at the forefront in getting onboard with the pilot digital currency.”
Jamaica will be the second Caribbean country with a digital currency, following the Bahamas and its Sand Dollar, that came out of pilot mode in October 2020.
Jamaica’s digital currency – a national competition has been organized to choose a name – was rolled on in a test phase in early August, with J$230 million (US$$1.6 million) minted. The NCB is the test “wallet” for the pilot, which will run through the end of the year. The goal is full roll out in the first quarter of 2022.
“We are excited about this opportunity. It is going to dramatically change the way business is done,” says Blake.