Business
JAM | Nov 13, 2022

NCB non-dividend uproar will have to be addressed 

/ Our Today

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Michael Lee-Chin.

A recent article by Lanville Henry, published by Our Today on why NCB does not pay dividends, has sparked widespread debate and conversation.

It transpires that Mr Henry was once associated with NCB and saw his shares in the banking group as a significant component of his pension plans.

With a market capitalisation of J$210 billion, NCB not too long ago had a share price of J$225, making it very attractive – the talk of the town. 

Today, NCB’s share price has plummeted to J$85.

This has caused concern and questions are being asked.

NCB Group’s The Atrium in New Kingston.

It was prudent during the COVID period to employ retained earnings as a buffer. It couldn’t be determined just how deleterious the impact would be on the banking sector and, more particularly, NCB’s operations.

This decision did not allay the howls of discontent and those howls have grown louder as the year draws to a close.

Both GraceKennedy and Scotia Group continue to pay dividends, so why can’t NCB?

Inflaming NCB shareholders even more, and driving them apoplectic, is the recently released financial statement that reveals that NCB Financial Group has almost doubled its net profits this year to $40 billion, up from $20 billion last year. This is a significant reversal in its fortunes for the better.

Meeting on November 10, the NCB Board said it will be looking to seek out growth opportunities, focus on building its digital footprint and therefore will not be paying a dividend.

This has only served to throw fuel on a raging inferno.

A few weeks ago, the Private Sector Organisation of Jamaica (PSOJ) lauded Michael Lee-Chin as a business god, the best Jamaica has ever seen. He came in his big jet – his mega yacht is parked in the harbour. He talks about ‘5 in 4’ and that Jamaica must turn to nuclear energy. The media worships at his feet, but he can’t pay a dividend. Something clearly isn’t right here and Lanville Henry is expressing what has been said for some time now.

“Well established companies that generate consistent revenues should pay dividends to their shareholders. Right now, Jamaicans are not making capital gains from NCB. It is not sharing its profits with its investors,” declared an angry shareholder.

The resentment is growing and the barbs aimed at Lee-Chin are mounting. Whatever he has acquired for his personal comfort has nothing to do with disbursing dividends. That’s just the green-eyed monster coming out.

NCB’s coming quarterly briefing and next annual general meeting will be marked by a volley of questions on this dividend issue. It will be very uncomfortable for the C-suite executives.

If anyone can quell the agitated mob, it’s Michael Lee-Chin. He will have to explain why dividend payments are being suspended and ask for patience and time.

One businessman wrote: “I just sold some of my NCB shares. The stock is falling and no dividend. What’s the point? You only reinvest dividends when your stock value is going up.”

An NCB executive commented: “Staff members are up in arms right now as they feel that the staff profit formula does not trigger a payment.The real impact is from the substantial reduction in the value of the shares. Companies such as Bryden & Evelyn and the Hanna Group have paid one hell of a price here.”

– Send feedback to editorial@our.today

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