Jamaica Gleaner
Published: Sunday | November 16, 2008
Home : Business
IFC considering equity stake in First Global

File photos
LEFT: Douglas Orane, chairman of First Global Bank and its ultimate parent GraceKennedy Limited.
RIGHT: Wayne Wray, president of First Global Bank.

First Global Bank (FGB) said Friday it was in discussion with the International Finance Corporation (IFC) for the financier to take an equity stake in the Jamaican operation.

Under the deal being negotiated, the IFC, a division of the World Bank that handles private-sector financing, would pump as much as US$20 million into Jamaica's number four bank in a sector of seven.

The investment would involve $10 million of equity and another US$10 million as a loan.

"This debt and equity capital from the IFC will provide stable funding for FGB's growth plan in its core business activities of loans to the retail and commercial sectors and represent a vote of confidence in FGB as a financial partner in furthering Jamaica's economic development," said bank president Wayne Wray in a company statement.

Confident

The deal faces regulatory endorsement and a final decision by the IFC board; but First Global appears confident of a positive outcome.

"This equity partnership with one of the world's strongest financial institutions clearly signals FGB's intention to become an even more competitive player in the local financial arena," said chairman Douglas Orane.

First Global has decided to get more aggressive in the commercial banking market, where its $24.7 billion of assets represents 4.6 per cent market share.

The sector commands assets of $530.2 billion, 71 per cent of which are controlled by National Commercial Bank and Scotiabank Jamaica.

Strategy

Wray's strategy has two focuses: a regional outlook in line with the strategy that the FirstGlobal financial group is now pursuing, but he also is seeking ways to leverage business within the Jamaican market by providing "additional financing options for Jamaican businesses, particularly in light of the general reduction of credit lines due to the global economic crisis," the bank said.

The loan funds would be "earmarked by FGB for onward lending to small and medium enterprises," said the bank, whose ultimate parent is conglomerate GraceKennedy Limited.

The deal is subject to approval by the Bank of Jamaica as well as the IFC Board of Directors, First Global said. The latter is to sign off on the proposal within a month, First Global said.

business@gleanerjm.com

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