Michael Lee-Chin, Chairman of NCB Financial Group (NCBFG), has sought to reassure stakeholders following the sale of shares by himself and former executive Patrick Hylton, stating the transactions are unrelated to any instability within the company.
Speaking at an investor briefing hosted by Mayberry Investments Limited (MIL) on Monday, Lee-Chin emphasized that his decision to sell shares was driven by personal financial needs, not a lack of confidence in NCBFG. The briefing, which also featured NCBFG CEO Robert Almeida and NCB Capital Markets CEO Angus Young, sought to address market reactions to recent disclosures of significant share sales.
Through AIC (Barbados) Limited, Lee-Chin sold 34.6 million shares during the 2023 financial year and an additional 9 million shares in late October 2024. Meanwhile, former CEO Patrick Hylton divested 13.7 million shares, approximately 25% of his holdings, between July and September 2024.
Market Reactions and Reassurances
The transactions, valued at over $2 billion, raised eyebrows, prompting Mayberry Group CEO Gary Peart to question Lee-Chin about the implications of these sales for NCBFG’s future. Peart noted that such moves by major stakeholders might be perceived as a signal to the market.
Lee-Chin downplayed these concerns, explaining, “Everybody has their own capital allocation needs, which may not have anything to do with the company’s performance. My confidence in NCBFG remains unshaken.” He added that the shares sold represent a mere 3.5% of his total holdings in NCBFG, which stands at 1.436 billion shares or 55.9% of the company.
Stock Performance and Outlook
NCBFG shares have struggled recently, trading around $50 for most of 2024—down 24% year to date and far below their 2019 peak of $249. Despite this, the company has seen a resurgence in profitability, reporting $15 billion in 2024 compared to $3.3 billion in 2023. Dividends have also resumed, with a final dividend of 50 cents set for December 2024.
Lee-Chin identified three key elements that make NCBFG an attractive investment: the disparity between perception and reality, operational inefficiencies ripe for improvement, and a lack of capital in the market. He emphasized ongoing efforts to reduce costs, aiming to bring the efficiency ratio below 50%, a critical factor for long-term growth.
Optimism from Analysts
Dan Theoc, Senior VP of Investment Banking at Mayberry, offered a bullish outlook for NCBFG’s stock. He predicted the share price could rebound to $96 within 12 to 15 months, nearly doubling its current value. “Given their strong fundamentals, NCBFG is well-positioned for growth despite market challenges,” he said.
Lee-Chin echoed this sentiment, encouraging investors to see the current price as an opportunity. “If you think framework-wise, the conditions for wealth creation are alive and well within NCBFG,” he stated.
Moving Forward
As NCBFG navigates a challenging market environment, the focus remains on reducing inefficiencies, enhancing profitability, and maintaining investor confidence. While share sales by top executives have sparked questions, the company’s leadership is intent on demonstrating that NCBFG remains a solid, long-term investment.
