By Andrew Green, Staff ReporterIN THE battle for corporate survival, RBTT Financial Holdings has determined that it needs size, flexibility and geography in its favour.
"Geographic and market diversification through acquisition has been a key aspect of our strategy to build a strong regional franchise," said Peter July, RBTT Group Chairman, responding to questions from The Gleaner. The strategy has paid off handsomely.
The RBTT Group recorded earnings attributable to shareholders of US$52 million for the half-year ended September 30, 2003, an increase of US$15 million, or 40 per cent over the corresponding period last year, it stated in its most recent financial statement. The first quarter performance improved further in quarter two, with profits moving up by 20 per cent from US$23.5 million to US$28.4 million.
RBTT Financial Holdings took the 2003 inaugural Mona School of Business-Financial Gleaner's GiltEdge Golden Award for its overall performance in November. RBTT also received the prestigious Banker Award from The Banker magazine in 2003 due to this impressive growth and profitability.
Over the last 15 years, the institution has grown from a relatively small parochial bank with operations in Trinidad and Tobago and the Eastern Caribbean markets, to what is in fact the largest and most profitable Caribbean-owned banking and financial services institution in the region.
"They have really expanded aggressively through acquisitions and mergers," said Mark Walters, vice-president for treasury at financial service providers, Dehring, Bunting & Golding. "This has been not only in Jamaica but in other territories."
RBTT Group entered the Jamaican banking market in March 2001, via their acquisition of Union Bank of Jamaica Ltd. (UBJ).
"One of the strengths of RBTT is its activity in the capital market," Mr. Walters said. "They have demonstrated a keen knowledge of risk associated with capital investment and how to mitigate those risks."
BOND ISSUES
The Trinidad bank is well known for its ability to raise funds through bond issues, and local entities sought US$130 million in funding from RBTT Merchant Bank, stated a Mayberry Invest-ments analysis of the enterprise in November.
The Jamaica Government secured a US$50 million loan from RBTT in November.
Mayberry said the Trinidad bank was also the centre of a corporate move by Jamaican billionaire Michael Lee-Chin as he prepares to expand his financial network to the twin island republic.
"We are not at the end of our acquisition drive because that is the way financial institutions grow and we are in a growth mode," Mr. July said. One new market showing promise is Costa Rica.
But Mr. Walters suggested that RBTT might have to "slow down" to ensure the cultures of the entities already acquired are aligned. He said, "The next couple of years going to be critical in terms of dealing with the cultures."
With the expansion outside of Trinidad, 62 per cent of the operating profit for the half-year ended September 30 was earned outside of Trinidad and Tobago as compared with 43 per cent in the previous year. Mr. July said major contributions to the improved profitability came from the subsidiaries in the Dutch Caribbean and Jamaica.
OVER 33 INSTITUTIONS
The Group now comprises over 33 institutions, including nine licensed commercial banks. The banks have 79 branches located in Jamaica, Aruba, Curacao and Bonaire, St. Maarten and Saba, Grenada, St. Lucia, Antigua and Barbuda, St. Vincent and Bequia in The Grenadines, Suriname and Trinidad and Tobago.
Other major subsidiaries are RBTT Merchant Bank; RBTT Bank Trust, a dominant player in trustee and asset management services in Trinidad and Tobago; and West Indies Stock Brokers Limited (WISE), the largest stockbroking firm in Trinidad and Tobago.
"Our vigorous expansion programme, which commenced in 1988, has transformed RBTT into a significant regional group, with consolidated assets of US$4.7 billion as at March 31, 2003," Mr. July said. "Our Group's strategy continues to focus on organic growth as well as expansion through acquisition."
