Brandishing a broad smile and exuding a youthful confidence that speaks to his younger-than-average age for a top banking executive, Mark is sitting in his office overlooking the beautifully lush and serene Queen's Park Savannah at the bank's headquarters in Port of Spain. “We are blessed with a lot of liquidity which, in the current climate, can be a good thing but at times we have trouble trying to find places to invest that liquidity,” he goes on to state. It's evident from that far from bemoaning the present state of the international banking sector, Mark is instead excited by the prospects of new opportunities and grand new projects for First Citizens over the coming months.
But what about the fact that Trinidad and Tobago has experienced some effects, albeit delayed, of the economic downturn? Local energy companies have suffered from reduced demand and fluctuating gas and oil prices, which have directly impacted their bottom line and led to significant job cuts. Local manufacturers who export to the many tourism-based CARICOM nations have seen orders dry up as foreign arrivals have slowed. Those that export to the US and UK faced markets that were pre-occupied with ‘buying local' in order to save their own economies.
As far as the local financial sector goes, things weren't looking too bright either. The collapse – and subsequent bailout – of the CL Financial Group by the Trinidad and Tobago Government sent shock waves across the Caribbean Sea, not least because the conglomerate's four largest financial institutions were responsible for assets valued at more than 25 percent of the country's GDP. The group was considered a Caribbean success story and had developed into the region's largest privately owned corporation with subsidiaries in over 32 countries.
In spite of the doom and gloom forecast by pundits around the globe, Mark and his colleagues at First Citizens seem surprisingly upbeat about potential new prospects throughout the Caribbean and Latin America. Trying to grow a business in new markets in the middle of a global recession is quite a daunting task. But if there is anyone who can spot a silver lining in what must be the largest and darkest raincloud in almost a century, Mark is that person: exuberant yet measured in his remarks, and completely driven towards the accomplishment of the institution's vision.
An orange lining
The first bright spot to come out of the CL Financial collapse was the acquisition of CMMB (Caribbean Money Market Brokers). Established in 2000, CMMB has become the largest full-service brokerage house in the Caribbean, managing assets of over $1.1 billion and recording profits of $11.1 million in 2008.
With headquarters in Trinidad and offices in Barbados, St Lucia and St Vincent and the Grenadines, CMMB has single-handedly created a vibrant secondary equities market, and has stayed true to its mission to ‘create, develop, educate and nurture the capital markets of the region'. Its distinctive orange branding and unique, free-thinking culture have allowed the company to carve out its own niche and attract a very loyal group of investors and staff.
Mark is clearly excited about the acquisition. “CMMB presents a great opportunity for us at First Citizens and one in which we have been interested in for quite some time. They have a great business model, a robust research arm and are young, energetic and entrepreneurial in spirit.”
When the largest full service brokerage house joins the highest rated indigenous bank in the English-speaking Caribbean, the result is synergy in every sense of the word. Each party brings something different to the table, they complement each other and are both excellent at what they do.
As far as Mark is concerned, First Citizens is the key to helping the brokerage firm realise its full potential. “In order for CMMB to blossom, the organisation needs two things: a ready and cheap source of funding. We can provide this.” With a capital base of $4bn, a capital adequacy ratio in excess of 18 percent and recorded profits at the end of fiscal-year 2008 of about $80 million before tax, First Citizens is well positioned to provide support if needed. But what does the bank get out of this deal? A strong, stable, well-respected brand with a loyal investor base and, most importantly, a presence in other Caribbean territories.
Although First Citizens has recently been involved in a number of landmark projects across the region including Sandals Antigua, Jamaica Energy Producers and LUCELEC (the St Lucian energy provider), in addition to a number of ventures in Barbados, it has generally kept a low regional profile. For Mark and the Corporate Banking Unit, the strategic alliance with CMMB translates into a regional network that provides opportunities to leverage the presence, contacts and on-the-ground expertise in these locations in order to discover new sources of business for the Group, so that in time First Citizens will become top-of-mind for large scale corporate and capital markets transactions in the Caribbean.
Why not First Citizens?
“We have the capabilities to compete on a global scale. We have a strong balance sheet, the liquidity we mentioned earlier, and a nose for credit – our delinquency ratio is consistently less than one percent compared to an industry average of three percent. We have proven ourselves in the local market and it is incumbent on us to grow the bank beyond the shores of T&T,” he retorts.
As he continues to speak, the justification for Mark's confidence becomes apparent. “There are a lot of opportunities coming out of the recent global crisis that we are prepared to seize. Quite a number of very solid companies have lost access to good financing and have had their lines of credit pulled… good companies with positive cash flows and strong management that have become ‘victims' of the downturn. We can provide what they need. If there ever was a time to make an impact and gain a foothold in a new market, this is it.”
Entering new markets is a bold move, but one which is not alien to First Citizens, which pioneered ATM and e-commerce in the Caribbean. It is countered by a measured approach to assessing clients and projects. “We have to be comfortable with the people we are working with, their track record, the regulatory and legal framework, the nature of the project, its viability and the social and economic impact.
“At the end of the day, yes, we look at the numbers but we also look at the people. Businesses will have ups and downs but at the heart of good relationships are good people. There is very little difference among the products that many banks offer. But there can be great differentiation and we set ourselves apart by the importance we place on human connections and our commitment to building strong relationships. Whether it is retail or corporate banking, a fixed deposit of $2,000 or a $200 million syndicated loan, it is the knowledge of our clients and mutual trust we enjoy that pay dividends over time, and which lead to success.”
This is the more culturally acceptable approach to conducting business in Latin America. Prior to joining the First Citizens Group in September 2008, Mark worked in Latin American and Caribbean markets during his tenure at the Inter-American Development Bank. There he was responsible for assessing the feasibility of and financing major infrastructure projects in the region.
With years of experience, a passion for the culture and a Blackberry full of contacts eager to do business with a progressive bank such as First Citizens, it's no wonder that Mark chose Costa Rica as his point of entry into Latin America. Spurred on by the stable economy, the government's progressive environmental outlook and the solid guarantees associated with financing major infrastructural projects – from power plants to toll roads and beyond – Mark considers it an ideal environment for First Citizens to establish a foothold in Latin America.
It is apparent that First Citizens embodies the resilient, ambitious spirit of Trinidad and Tobago. This spirit motivated the island to host the fifth Summit of the Americas this year, and to host the Commonwealth Heads of Government Meeting in October. Whilst many other organisations have become stagnant or retreated, this bank is moving ahead with purpose into new worlds, full of possibility.
For further information tel: +868 624 3178;
email: sekou.mark@firstcitizenstt.com;
www.firstcitizenstt.com
