Published: Friday June 20, 2008
Pan Caribbean, the Jamaican merchant banking subsidiary of the Sagicor Group, has completed its transformation to a commercial bank and will begin offering the requisite services to client as of Monday.
In fact, the company announced yesterday that it has dropped the 'merchant' from its name and will now be known as PanCaribbean Bank.
Henry Pratt, who headed PCMB, will continue to run the new bank, which is capitalised at $3.3 billion.
"We will complete our conversion on June 23 and our branches will be open as usual to our customers and the general public, offering new commercial banking products and services," Pan Caribbean said in its statement.
"Our official launch activities will begin early July."
Pan Caribbean group, which has assets of about $50 billion, will become the seventh Jamaican commercial bank, still shy of the 11 that existed prior to the mid-1990s meltdown of the financial sector, which saw the collapse of several banks and insurance companies.
At the time of the financial sector crash, there were more than 30 merchant banks in the market.
In the wake of fallout, several of the ailing banks, the portfolio cleansed of bad debts acquired by the Government, were merged and sold off.
The emerging philosophy in the aftermath of the crisis, that cost taxpayers over $140 billion, was to frown upon financial services conglomerates - or that there should be clear divisions between the various parts of their operations.
But those positions, if not changed, are now less rigid, leading to the Government's willingness to consider granting commercial banking licences to entities that, like Pan Caribbean, offer a range of finance-related services, including stock and bond trading.
In fact, the finance minister, Audley Shaw, is now considering a commercial banking licence for Jamaica Money Market Brokers (JMMB), the island's largest bond traders.
At a recent JMMB investor briefing, Shaw had said that Jamaica could do well with greater competition in the commercial banking sector.
While Shaw only formally signed off on the issuing of Pan Caribbean's licence on June 10, the previous administration had signalled before it left office last September that the firm would get the green light - a path continued by Shaw when he assumed the portfolio.
Granted April 2006
Indeed, approval for the licence was granted back in April 2006 by former Finance Minister Dr Omar Davies.
The bank has existing branches in Kingston, Montego Bay, Mandeville, Savanna-la-Mar and Ocho Rios.
Pan Caribbean's CEO, Donovan Perkins, told shareholders at the company's recent annual general meeting that the conversion to a commercial bank cost $200 million, with the bulk of the money spent on technology infrastructure.
"The bank should be able to start recouping the cost by the fourth quarter of 2009," he said.