6 months ago
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Michael Lee-Chin remains in control of NCB Financial Group Limited, operator of Jamaica’s largest commercial bank, even as one of his companies sheds millions of shares and Cornerstone takes up a slot among the top owners.
Lee-Chin is currently the chairman and largest shareholder in the financial conglomerate.
“I am fully committed to NCB,” he told the Financial Gleaner on Monday.
The latest disclosures of shareholdings in NCB Financial show that the primary holding company utilised by Lee-Chin for the asset has seen its control fall from an outright majority to a plurality of the shares.
There is an expectation in the market that big sellers of the stock are looking to offload another $4 billion worth of NCBFG shares, a theory the investor and businessman rejects.
AIC (Barbados) Limited, controlled by Lee-Chin, reduced its holdings in NCB Financial by nearly 44 million shares to 1.2 billion during the past year. It now holds 47.1 per cent of NCBFG down from 49.5 per cent a year earlier. Lee Chin also controls a further 1.76 per cent though AIC Global Holdings Inc.
Those holdings combine to 48.86 per cent.
Last year, was the first time since at least the pandemic that AIC Barbados has seen its ownership dip below 50 per cent.
Over the years, the holdings by AIC Barbados have climbed from 53 per cent in 2019 to 52.1 per cent in 2020; climbed back to 52.6 per cent in 2021 and 52.7 per cent in 2022; then shrank again to 51.15 per cent in 2023, and further to 47.5 per cent in September 2024. And in December, it dipped again to 47.14 per cent.
Also during the past year, Patrick Hylton, former president and group CEO and a ‘top 10’ owner of NCB Financial since 2023, sold 22.3 million NCBFG shares, bringing his holdings down to 38.5 million shares, according to disclosures for the December 2024 quarter.
The entities that acquired shares heavily in the year were led by National Insurance Fund, which purchased an additional 57.7 million shares and now 90.8 million units; and Cornerstone, which became a new ‘top 10’ shareholder with 31.8 million units.
The latest large transaction in the NCBFG stock was a block trade of nine million units on January 30, worth nearly $450 million. But Lee-Chin said the disposal was not done by him.
“I am unlikely to be selling at these prices,” he said.
Last Thursday, Mayberry Investments head of investment banking, Dan Theoc, said NCBFG’s stock could grow 50 per cent, once the sell-off by large shareholders abated.
“There are some big-selling shareholders in the market, between Michael Lee-Chin, Patrick Hylton and Dennis Cohen. There is no doubt that between the three of them, they probably want to sell $10 billion worth of the stock and maybe only $6 billion has been sold in the last year or so,” said Theoc, at the Mayberry Investor Forum last Thursday.
“So, I think there is another $4 billion of overhang. That is the biggest problem of NCB in my view,” Theoc added. “I want to see those three shareholders come out of the market. I bet they will be out of the market in six months.”
Lee-Chin responded to Theoc’s commentary, saying “The amount is conjecture, if any”. Neither Hylton nor Cohen responded to requests for comment up to press time.
NCB Financial trades at 70 per cent of its book value, while its largest rival, Scotia Group Jamaica, trades at 1.3 times its book value.
“The stock is cheap, that’s a fact,” said Lee-Chin. “So there’s an opportunity for buyers interested in creating wealth.”
He said the conglomerate was fortified with new management and a board over the last 18 months, and that the group is “delivering the results”. NCB Financial Group reported a profit of $5.15 billion for the December 2024 quarter, marking a 75 per cent year-on-year increase. The stock price currently hovers below $49, which is just about one-fifth of its pre-pandemic peak price of $230.
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