Looking for leverage

Republic Bank managing director, David Dulal-Whiteway, does not think that his bank’s shares price is inflated and is of the view that the current price is a true reflection of the market.

"No. I don’t think that the shares are overinflated. I think that they are a true depiction of the market," he said in his first press conference at the bank’s executive offices since being appointed to the position of managing directors. The share price stood at $112 on the stock exchange last week.

He was responding to the view put forward by some analysts that Republic’s bank’s shares are not a true reflection of their current price. The market will correct itself, they say.

The managing director said though that the price of the share was based on the market and what people are willing to pay. "If you don’t buy Republic Bank shares now, when are you going to buy?" he asks.

‘If you believe in market efficiency then I believe that the shares are correctly priced," he told reporters, adding that he expected to see the share price going up.

He said while there was a heavy demand for the bank’s shares, there are not that many available and noted that this was what was driving demand.

He did acknowledge that Republic Bank share price has appreciated since the Clico takeover. Even though Clico had increased its shareholding, people, he added saw it as a sign of confidence.

Dulal-Whiteway was also dismissive of a stock split, saying that while this adds value to people’s minds, "there was no economic value" to the bank.

"You won’t see us with a rights issue," he said.

Dulal-Whiteway has taken over the reins from former managing director, Ronald Harford who is now a director on the board.

Small in stature, Dulal-Whiteway, comes across as a man who wears leadership easily. He was direct when questions were put to him and turned to his other executives if he felt that they could do a better job at answering reporters’ questions.

During the session, the managing director was asked about the relationship with Clico, since the insurance giant was now the majority shareholder in the bank.

Without batting an eye, he stressed that Clico, owned by Lawrence Duprey, had maintained its non-interference policy.

"Clico said they were not going to interfere," he said in a modulated tone, noting that the company had acted in good faith in not interfering in the operations of the bank.

"I expect that they will continue to do so," he said of the insurance company.

He later noted that he did not have a problem with Clico being the major shareholder. "We (Clico and Republic) want the same thing and that is to make the bank as profitable as it can be while meeting the needs of our customers," he said after the formal press briefing.

"There is no conflict."

Clico, he indicated, has kept its four independent directors on the board to represent its interests: Attorney Russel Martineau, John Martin, UWI principal Dr Bhoe Tewarie, and Chandrabhan Sharma.

Dulal-Whiteway said shareholders have seen that there was no change in the bank’s operations, citing the "credible appreciation" in share price noting that this was a sure sign of confidence in the board.

On the bank’s growth strategy, Dulal-Whiteway said the bank’s growth had been in the region of 13 percent, noting that the Trinidad and Tobago market accounted for some 80 percent of its profits. Still, he said Republic was constantly looking to see how it could grow.

"We can easily double our size without having to go outside," he said, noting that the challenge now was to find new markets that will afford them room to grow. One such market, he said, was the Bahamas. But he ruled out entering Brazil and Argentina, saying that they were huge markets with massive banks.

"We have a good strong base for growth ," he said and pointed to the bank’s capital base which now stood at about $30 billion.

"I always joke with my executives that there is money there," he said with a smile.

Also present were Gregory Thompson, deputy managing director and Nigel Baptiste, an executive director with the bank whose previous portfolio was general manager, human resources.

Dulal-Whiteway said their appointments came about because of the bank’s emphasis on succession planning.

"We do not have to go outside. We are not looking for a new culture," he said, an indirect reference to other banks that have brought in people to fill senior bank positions.

He said the strategy for the bank now was consolidating its leadership position.

"Our aim is to be one step above the others," Dulal-Whiteway said.