Sabrina N. Gordon, Business Reporter

Naar

He may have grown the institution's surplus by nearly 40 per cent last year and achieved a return on assets which few banks could sneer at, but that is not enough for Basil Naar at Churches Co-operative Credit Union (CCCU).

Now, Naar is on a mission for robust growth as he attempts to position the credit union as an influential player in Jamaica's increasingly competitive financial sector. He has been hunting savers, rolling out new products and hiring staff to sell them.

"We intend to increase our loan portfolio and grow deposits by at least 20 per cent by the end of the year," Naar, a former senior manager of the now defunct Workers Bank, told the Financial Gleaner this week.

Third largest

At the end of last year, Churches, had assets of $3.3 billion, a deposit base of $2.7 billion and a loan portfolio of a similar $2.7 billion.

Judged by assets, it was the island's third-largest credit union. Indeed, under the flamboyant Naar, CCCU has shed its formerly quiet dowdy image for a more aggressive demeanour. It is apparently working.

Last year, for instance, the credit union reported net income of $125 million, up 40 per cent on the previous year. Significantly, it was able to keep its operating expense six per cent under budget - at $369 million as against a projected $380 million.

"This represents a significant achievement for the company to not only stay within budget, but to go below it in a period when cost containment was a major issue for companies," Naar said.

This success in holding costs in check helped Churches to realise a return on assets of four per cent - a fact which Naar likes to trumpet.

"This is comparable to commercial banks and represents a great achievement as the business is run on a much smaller margin than do the banks," he said.

Naar said that these results are the outcomes of the strategic initiatives of the past three years, aimed at enhancing productivity by having staff working towards measurable objectives. The effort has also been about changing the culture of the institutions: All staff has to be aware of the objectives of the company and the products and services its provides.

Naar has also been recruiting staff. At the end of last year, Churches employed 160 people, a 14 per cent hike on 2006. More recruiting could take place as new products hit the market and if business demands it.

Churches now has 112,000 members, but is projecting to grow this by 6,000, or over five per cent, by the end of this year.

"The strategic objective of the company is to have a micro- and small-business unit in all parishes by the end of 2010, and to be the provider of retirement-fund products to members on a broader scale by the end of the year," Naar explained.

Retirement products

Churches is also offering retirement products, which it soft-launched during the first quarter of 2007, while awaiting the approval of the Financial Services Commission ahead of a more aggressive marketing campaign.

Naar also wants to build on Churches' currently puny mortgage business, which is currently supported mainly by its own funds. He is seeking long-term, external financing to widen the portfolio.

But it is the retirement business which Naar sees as opening the door to long-term relationships with clients and a good foundation for the growth of the organisation.

"We are developing a relationship product rather then a transactional product to grow the business around," said Naar. "The key to success is to have a long-term relationship with the customer/member for the next 15-20 years. This gives us ample opportunity to sell other products and services to that member."