$86 million blow

SAGICOR Financial Corporation has suffered a hit of $86 million (US$43.0 million) as a result of its participation in the Government of Barbados controversial debt exchange programme.

This figure was given to the media yesterday during a news conference Sagicor hosted at its Cecil deCaires Office, Wildey, St. Michael.

Sagicor officials, Group President and CEO, Dodridge Miller; Ravi Rambarran, Group Chief Operating Officer; and Edward Clarke, Executive Vice President and General Manager, Barbados Operations, spoke to the media at the breakfast function.

Miller said that while the company’s shareholders have taken the blow, there is a sufficient capital that allows the company to participate in the exchange. He told the media that Sagicor is still strong with 257 per cent risk based capital ratio, which is in line with international best practices. “Shareholder value may have been impacted, but not impaired and therefore shareholders will not see the impact of this,” Miller assured. He said that immediately after taking part in the exchange, the company’s Directors declared a dividend which was in line with what was declared in previous years. “So shareholders will see Sagicor as a very strong company diversified across 22 countries and which can actually withstand the impact of actions in one country,” said Miller.

Rambarran stated that this is all part of the risk and reward which shareholders bear. “So yes in a short term there was a provision of Bds$86 million, but typically shareholders take a longer term horizon than nine months,” he explained.

The official reasoned that even after that provision the company has continued to manage its shareholders well. Rambarran pointed out further that despite the shareholders having borne that position, the benefits of the company’s policyholders remain in tact. The Sagicor official noted that third quarter results showed a net income attributable to shareholders that was less than that in the prior period a year ago. Like Miller, Rambarran also said that that despite that the company’s capital ratios remained quite healthy at the end of the third quarter to September 2018. Rambarran noted that the capital ratio at September was about 257 per cent, and told the media that it speaks to the resilience of Sagicor as a Group.

According to him, that resilience is formed by the Group’s diversity across 22 countries where the company is operating, by the diversity of the various lines of businesses that include insurance, pensions, asset management, banking, and by the customer segment they serve. “So we are pleased with the results and we are pleased that the Government of Barbados debt restructuring programme is behind of us,” Rambarran remarked. He revealed that as such they at Sagicor will be looking to the positive economic benefits to emerge from such a debt restructuring because “we have observed the same phenomenon in Jamaica”, which had entered an economic recovery programme with the International Monetary Fund. The Sagicor Group COO indicated that with Barbados’ problems being dealt with head on, some confidence has been restored to the country and that Sagicor is optimistic about the investment climate. (JB)