Jamaican bank targets market share

For a company originally founded in 1837, the National Commercial Bank Jamaica still has the nimbleness to outpace its rivals: not just Best Banking Group, Jamaica and Most Innovative Bank, Jamaica in the 2010 World Finance awards, but the current recipient from the Jamaica Employer's Federation of the titles Employer of Choice and company with the highest employee satisfaction.

The Employer of Choice survey, says Patrick Hylton, Group Managing Director at National Commercial Bank Jamaica, focuses on areas that include opportunities for training and development, communication, compensation, treatment of workers by management, health, safety and welfare policies and human resource service quality.

“ Our success in the survey is attributed to targeted programmes in each of these areas,” he says. “Learning and development within NCB is supported by our Corporate Learning Campus, accredited by the University Council of Jamaica. We offer a number of courses including our Management Trainee Programme, Branch Manager Development Programme and Institute of Leadership and Organisational Development. Our ‘access-anywhere' e-campus allows employees to have access to over 140 courses, books and periodicals 24/7 from any location.”

Strong lines of communication between the management team and employees are “deeply embedded within NCB's DNA”, Mr Hylton says. “We highly value transparent and open dialogue. A major element of our internal communication strategy includes ensuring that employees have direct access to the senior management team. We provide multiple communication channels, including a human resources website, emails, discussion forums and an employee customer management system.

“We ensure that all employees are treated with fairness and the utmost respect at all times. This philosophy of fairness is also embedded in our diversity policy, which recognises the differences among our employees. We have had no industrial action among our clerical staff in the last decade.”

NCB prides itself on offering highly competitive compensation packages to its employees, Mr Hylton says, and at the same time it is keenly interested in its employees' wellness and work-life balance. “We provide a state-of-the-art Wellness and Recreation Centre to our employees outfitted with gym, basketball, tennis, netball, pool, clubhouse and other facilities. We also provide gym subsidies to employees who are not able to access the Wellness and Recreation Centre. These strategies have engendered a work environment conducive to high levels of worker productivity, engagement and customer service excellence.”

Concentrating efforts on the sorts of measures that gave it the “Employer of Choice” title, Mr Hylton says, has a definite impact on the bottom line. “New research underscores the importance of ‘engaging employees' in their jobs and companies as a way to foster high productivity, high morale and excellent customer service,” he says. “We believe that there is a strong positive correlation between employee engagement and the bottom line.

When employees are engaged it means that they are aligned with the strategic goals and objectives of our organisation. This has resulted in our sustained profitability.”

At the same time, good employee satisfaction figures have an effect on the customer experience, Mr Hylton says. “There is a direct correlation between employee engagement and the service they provide to customers. Well-trained, engaged employees are those who are driven to create innovative products and services and contribute to the richness of a superior customer experience.”

In the turbulent economic times seen over the past two years, even a committed employer like NCB has had to make cuts. “Communication and transparency are paramount in any changing environment: this has been a key element of our people strategy,” Mr Hylton says. “We communicate the ongoing impact of economic conditions on the company. We outline in great detail the areas and staff that will be impacted. We provide opportunities for staff members and their representatives to engage senior management on these issues through the Managing Director's Road Show and State of the Business Meetings as well as Divisional meetings. We are keenly aware of the psychological, emotional and economic impact of these separations of our staff, so we provide group and individual counselling, career counselling and resume preparation, mock interviews, entrepreneurship workshops and entrepreneurial grants for approved projects.”

NCB's chairman, Michael Lee-Chin, is one of the best-known entrepreneurs to have come out of Jamaica. But affection among customers for the chairman's achievements will only take the bank so far, Mr Hylton says. “Our customer research has indicated that there is a great deal of emotional equity attached to brand NCB, arising from our long history of Jamaican ownership. This, coupled with our Chairman's unwavering commitment and passion for Jamaica, has certainly inspired confidence in so many of the persons that support our organisation. How we position ourselves in the market does take these factors into account, to some extent.

“However, we have also found that customers, now armed with more exposure to and knowledge of global financial services, are equally demanding of their bank, whether it is local or foreign-owned. The competition to win market share must be fought not only on emotive grounds, but with the product innovations, service expertise and confidence in financial strength that the institution is able to deliver. NCB's consistently high level of performance, particularly in the past ten years, when local and international financial markets have experienced significant turmoil, demonstrates that our operating fundamentals are sound and there is solid support for our institution.

“The fact is that Jamaicans do have a strong sense of pride for role models of home-grown success and we therefore want to not only do well, but to do good, so that the spirit of Jamaican achievement can be continually nurtured. Our corporate mantra says we are ‘Building A Better Jamaica', and the extensive work of our philanthropic arm, the NCB Foundation, in the area of education, entrepreneurship and community development gives some indication of the level of commitment we have to nation-building. Our greatest concentration of customers is located in Jamaica, and serving them well remains a core focus for our business, as this ultimately redounds to the wider success of our country.”

As a truly indigenous financial institution, with local decision-making authority, NCB has been able to respond quickly to customers' needs and as a result has largely led the market in terms of introducing innovative new products and services, Mr Hylton says. For example, NCB was the first financial institution in the Jamaican market to establish a business unit focused on SME customers, in 2003, and since then it has continued to lead the introduction of products and services tailored to this sector. “Over the past year we have introduced several new products and services for our personal and business banking customers, focused on meeting their financial needs and convenience,” Mr Hylton says. These include a multi-currency Visa Classic card that offers the convenience and of local and international purchases with the ease of repayment in Jamaican dollars.

NCB also led the market by introducing low-rate auto financing for new and used vehicles, at the same time extending the maximum repayment period on new vehicles to 7 ½ years, the longest in the market.

On the business banking side, NCB introduced its “F.A.R.M. loan”, in conjunction with the Jamaican Ministry of Agriculture and Fisheries, providing single digit financing to farmers growing selected crops. NCB also created a J$1bn single-digit loan fund for SMEs, the largest and lowest priced pool of funds in the market.

Funds are available to support capital expansion and working capital for start-up companies, business owned by women and those companies in the agricultural and manufacturing sectors.

No institution could have escaped the effects of the financial turmoil of the past two years, and NCB saw its rate of loan growth slow as Jamaicans adopted a “wait and see” approach to their financial needs. “We have also seen increases in the levels of loan delinquency and bad debts and our non-performing loan portfolio as a percentage of overall loans rose from 2.34 percent in 2008 to 2.64 percent in 2009,” Mr Hylton said.

“Notwithstanding, for the year ended 30 September 2009, NCB recorded NPAT growth of J$1.5bn, or 18 percent over the 2008 financial year.”

Overall, Mr Hylton says, this year's Best Banking Group, Jamaica “coped well with the crisis, and our goal has been for NCB to emerge a stronger institution after the crisis. Even before the global financial crisis was acknowledged by US and Europe, we had made changes in our business that would enable us to respond to negative changes in the environment.

“As an institution, we recognised that we needed to hold large levels of liquidity to meet any unexpected demands, whether from our customers or from other financial institutions. Therefore, we were able to respond immediately to requests for repayment, enhancing our reputation globally and our business locally.”

Over the next three years, Mr Hylton says, NCB sees itself cementing its position as the premier financial services institution in Jamaica. “There will be a strong focus on the SME sector where the penetration by the banking sector is still moderate.” Economic growth over the short term is expected to be negative to flat, and as a result, growth within the financial services sector will largely be driven by market share gains, Mr Hylton says. But NCB believes itself equal to the challenge: “We are positioning ourselves to gain a disproportionate share of gains by focusing on enhancing how we serve our customers and our ability to identify and respond to their needs. In addition we will continue to ensure that our talented employees are equipped to execute against the organisation's strategies and continue to invest in our technology, a key enabler for NCB's innovative spirit.”

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