January 14, 2005

No take-over yet at NCB

It is too early to talk about a take over of the country’s state-owned National Commercial Bank (NCB).

This is the latest information coming from NCB in light of a front-page story carried in this paper last week.{{more}}

In an exclusive interview with the SEARCHLIGHT on Monday, Chairman of the NCB, Desmond Morgan and new General Manager, Mario Young, said the bank’s main goal at the moment is “institutional strengthening” which will put it on a path to become more efficient and deliver a better product.

The chairman disclosed that though several offers had been made from banks in the region, NCB has to make sure its house is in order first, so in the event the opportunity comes to sit at the bargaining table the bank can speak “real numbers”.

“If you’re running a flour mill or a factory, you could get away with selling just like that, but that is not the same with financial institutions,” said Morgan.

“You cannot rule out anything, but at the end of the day, the bank will follow the route that literally is in the best interest of the people and the government will set the tone in the direction they want to go in terms of strategic alliance,” said Morgan.

Last week SEARCHLIGHT broke the story that the National Commercial Bank had a new manager, in the person of First Citizen’s Bank Corporate Manager, Mario Young.

Young a Trinidadian with over 30 years experience in banking will be in charge of NCB for the next three months. Two other First Citizens senior managers who will assist him with the institutional strengthening plan will join him in mid-February.

Morgan said NCB would go through a phase that will correct problems that have to do with operations, procedures and credential guidelines.

He agreed that outside help had to be sought because there are persons who have been veering away from established banking procedures.

“Persons have not been sticking to the letter of the law in following procedures. If something is not managed, over time there is a tendency it will deviate from what it will be,” said Morgan as he disclosed that the bank is attempting to bring in best practice.

However, he said from its credential standpoint the bank is fine with its balance sheets and liquidity.

“Financially the bank is sound,” said Morgan.

Morgan said to date NCB is the largest bank in St. Vincent and the Grenadines with a 46 per cent stake on the domestic market.

He said correcting the problems is essential and that cannot be achieved “by sitting down and hoping these things will correct itself.

“You have to take action by teaming up with a successful company and company that has done it.”

Despite that First Citizen’s Bank will be giving assistance to NCB Morgan made it clear that this must not mistaken as a move by the bank to form strategic alliance.

“We’re not talking about strategic alliance at this point. We’re talking about gaining a package of assistance from First Citizen that will help us to become more efficient and be able to deliver a better product,” Morgan said.

“This exercise is independent of any strategic alliance. This is a partnership of co-operation and assistance,” said Morgan as he explained that First Citizens Bank is a company that encountered similar experiences during its initial phase such as what is being experienced by NCB.

Morgan said the goal of the bank is to ensure that it continues to play a major role in the development of the country. The chairman promised NCB will continue to be one of the leading financial institutions and is hoping after this exercise it will be able to look at new products that can be offered to the public and serve the country better.

The state of affairs at the NCB was established in 1977 and Young used the opportunity to make it known that he had assisted in NCB’s initial phase. Young said he worked at NCB for period of two months in 1978.