NEWSROOM

Wednesday, April 08, 2009
Letter to the Editor Jamaica Observer re article “… payout on the way?”

To the Editor
Jamaica Observer
40-42 ½ Beechwood Avenue
Kingston 5

Dear Sir:
 
We wish to make the following comments, in light of the inaccuracies in the article entitled “Could there be a large NCBJ payout on the way?”, published in your newspaper on Wednesday, April 8, 2009:
 
1.      While we are unable to comment on when or what interim dividend (if any) will next be declared, any declaration of dividend will remain consistent with the Dividend Policy and the best interests of the Bank. We recognize dividends as providing an opportunity for a shareholder to get a return on their investment but the Bank does not declare dividends simply to meet the needs (at the time) of a particular shareholder.
 
2.      Dividends are paid from profits of the Bank, not the Group (which also comprises the wealth management and insurance businesses). The Bank’s Dividend Policy states that dividends will be paid from the Bank’s realized earnings up to a maximum of 50% after taking account of all transfers (e.g. to reserves). The Bank’s realized earnings are not the same as the Group’s net profit, which appears to have been used by the article’s writer to calculate the dividend payout ratios. Our dividend payout ratio since 2002 has ranged between 23.03% and 44.73%.
 
3.      Regarding the use of retained earnings, we view retained earnings as important to our ongoing capital strength. It is a key component in bolstering our capital base in order to meet our customer obligations and maintain the soundness of our organization.  We are, therefore, deliberately conservative in our approach to the use of our retained earnings and we do not anticipate any change in our stance, especially given the current economic environment.
 
4.      Our capital adequacy ratio is actually 13.02%. This is well over the BOJ benchmark of 10% and represents some $3.5B of capital in excess of the regulatory requirement, positioning us to withstand any unforeseen challenges.
 
 
Yours sincerely
 
Sheree Martin 
Senior Assistant General Manager
Group Marketing & Communications Division