The financial sector is abuzz as Cornerstone United Holdings Jamaica Limited (CUHJ) and Barita Investments Limited (BIL) move forward with a bold restructuring plan. Shareholders from both entities have approved a composite scheme of arrangement to transfer the majority ownership of Barita Investments and Cornerstone Trust & Merchant Bank Limited (CTMB) to a newly formed entity, Barita Financial Group Limited (BFGL).
The decision, finalized at meetings held on Monday at the S Hotel Kingston, received overwhelming support. According to a release on the Jamaica Stock Exchange, 81.87% of Barita Investments shareholders and over 95% of CUHJ shareholders voted in favor of the scheme. This pivotal step marks the next phase of Cornerstone’s evolution, pending final court approval scheduled for March 18.
The New Structure
Barita Financial Group, a wholly owned subsidiary of Cornerstone Financial Holdings Limited (CFHL), is set to emerge as a powerhouse in Jamaica’s financial ecosystem. Created to streamline governance and enhance efficiency, BFGL will become the direct owner of CTMB and hold a 75.68% stake in Barita Investments. CTMB, Jamaica’s sole remaining merchant bank, is positioning itself for a digital future, with ambitions to become a full-fledged digital bank.
Shareholder Questions and Future Plans
Despite the overwhelming approval, shareholders raised questions about the long-term vision of the restructuring. Bruce Levy, representing Sagicor Select Funds Limited, queried whether shareholder approval would be required in Barbados, where CFHL is domiciled. Mark Myers, chairman of CUHJ and Barita Investments, assured attendees that while not legally necessary, such a meeting was being scheduled before the court hearing.
The possibility of delisting Barita Investments and listing BFGL was another topic of interest. Malindo Wallace, a legal expert and former company secretary of Barita, clarified that while this is mentioned as a potential future event, it is not part of the current scheme.
Transforming CTMB into a Digital Bank
In his presentation, Barita Investments CEO Ramon Small Ferguson highlighted CTMB’s technological advancements and plans to transition into a digital bank. “We are closer than you think to providing unparalleled digital services to our clients,” he said. Dane Broadber, the CEO-designate of BFGL, echoed this vision, stating that commercial banking capabilities are also on the horizon for CTMB.
Financial Performance and Expansion
CTMB has shown resilience in its financial performance, with a 7% rise in operating revenue to $490.47 million. However, increased expenses saw its net profit decline by 57% to $9.54 million. As the institution pushes toward digital transformation, investments in fintech capabilities and operational efficiency are expected to drive future growth.
In addition to local ambitions, CFHL is pursuing regional expansion. The company is awaiting regulatory approval to acquire a majority stake in Clarien Group Limited, a Bermudian financial institution.
A Bold Vision for Jamaica’s Financial Sector
Cornerstone Financial Holdings Limited continues to champion innovation and growth within Jamaica’s financial landscape. The restructuring aligns with the Banking Services Act of 2014, which mandates the organization of regulated companies under a financial holding company.
Mark Myers summed up the significance of the move, stating, “This initiative reaffirms Cornerstone’s commitment to strengthening the financial sector and contributing to Jamaica’s growth and development agenda.”
As BFGL awaits its financial holding company license from the Bank of Jamaica, the company is poised to set new benchmarks in governance, customer experience, and operational excellence. With its sights firmly set on transforming Jamaica’s financial landscape, Barita Financial Group’s journey is just beginning.
