Michael Lee-Chin, chairman of NCB Financial Group, was the first guest speaker at the ‘Appleton Circle’ dinner, an event jointly hosted by Appleton Estate and Our Today.

It took place last Tuesday (July 23) at The S Hotel in New Kingston and was well attended by business leaders.

Lee-Chin took the opportunity to talk about transforming NCB and drew attention to a newspaper article where he said of the country’s leading banking institution “I’m Not Happy”. 

He told diners who engaged in Master Blender Joy Spence’s Appleton paired rum tasting that he was not wholly pleased with the efficiency and governance of the bank.  

“Governance starts with the individual. I also was not happy with the customer service and outlined this. What we had to do [was] build trust so the question is, how do you build trust? You can either minimise [the] trust deficit or build trust. This means firstly, work on projects together whether it be with your spouse, children, friends or children. Secondly, each participant in the project has the realise the aim is to get you to present the best version of yourself and to draw out the best version of the other parties’ selves. You must come to the project with clean selfless hands. Thirdly, you must be prepared to be vulnerable. How many of us are prepared to show vulnerability? When you show vulnerability, that’s when people trust you. Public relations professionals tell you to always present your best face but everyone knows that when you show your best face, there’s a lot you are not revealing. People need to be open and transparent. 

“Success begets complacency, begets failure.  I came in on the 17th of July 2023. There’s a big difference [between] when you are a non-executive chairman and when your hands are on the wheel. There were many complaints about our ABMs. I thought to myself, how can Amazon distribute millions of parcels per day on time and on budget and yet we can’t get 300 ABMs right? How is that possible?

“The answer came to me, because Amazon sees itself as a logistics business. This means they hire logistics engineers and they study all the processes of the business. A bank should be a logistic business also because we repeat processes every day, so how many logistics and workflow engineers do we have? How many people are doing time and motion studies? None,” the NCB chairman mused further.

“So how do you define yourself, that is important. No bank in the world sees itself as a logistics business. It is, but it doesn’t think of itself that way. Not only are we a logistic business we are a sales business also. Once you recognise you are a bank in the logistics and sales business you then start hiring people who have those capabilities and training. It took me a year to figure this out.  We are not just a bank, we are a logistics business and a sales business, everything else is supporting cast, “ said Lee-Chin.

He further added that 99.9 per cent of all problems can be distilled by the principal/agent problem. This is whereby the owner of the business—the principal, manager or agent—has different visions for the business. It is an owner/employee problem. Be it attitude or standards,  there is a divergence.

“We solve this problem by making our agents better principals. This means staff must become owners. So what are the characteristics of an owner?  A great owner takes responsibility. A great owner is accountable. A great owner suffers consequences when things go wrong. As CEOs, we have to be conscious and make our staff better owners. So we have to hire people with ownership potential. Then we have to put in place training to prepare these diamonds in the rock to be good owners.

So given this thinking, Dennise Williams posed the question is Lee-Chin happy with NCB now?

“It is a work in progress. Since last year, our cost-to-income ratio has moved from 82 per cent to 66 per cent,” replied Lee-Chin. 

The cost-to-income ratio refers to money spent to operate versus how much the company earns from revenue. For traditional retail banks, a cost-to-income ratio of around 50 to 60 per cent is often seen as acceptable.

NCB has made some notable improvements here. For the quarter ended September 2023, the cost-to-income ratio was 82.54 per cent. For the quarter ended December 2023, it was 73.93 per cent and for the quarter ended March 2024, it was 66.68 per cent. So for the quarter ended at 82.54, the margin was 17.46 per cent. At 66.68, the margin is 32.32 per cent.

To go from 17.46 to 32.32 is a 90 per cent improvement. That is significant.

Lee Chin continued: “Secondly, our customer experience has improved. There is less noise in the market about our ABMs.  It is improving but I am still not happy with our customer experience. I will be happy when our efficiency ratio is 50 per cent, not 66 per cent.

NCB has seen an increase in its profitability and is now paying out dividends regularly.