Looking beyond

Having tested the water in Chaguanas for a number of years, the bank’s objective now is to try and carve a niche for itself by going up against the more traditional financial institutions and penetrating regional and international financial markets.

Duane Hinkson is the man leading the bank’s new charge. In an interview at Intercommercial Trust and Merchant Bank (ITMBL)’s new offices at the Furness Building in Port-of-Spain last week, Hinkson, ITMBL managing director, sounded as if he was ready for it.

Asked what encouraged him to move to IBL in September 2005, Hinkson said that decision was based on an offer by IBL Group CEO, Hugh Duncan, whom he knew from his stint at Citibank. Hinkson said both he and Duncan had a mutual philosophy about how to “shape and mould” a financial institution and this might not have found fertile ground in the more bureaucratic environments which exist in TT’s traditional banks. IBL started off as a community bank when it commenced operations in 2001 in Chaguanas, with one other branch in Marabella. At the time, it used its merchant bank facility as a vehicle for certain financial services such as mortgages.

Hinkson said last month’s formal launch of ITMBL as a distinct corporate entity within the IBL group shows that it is capable of competing against the bigger and established banks in TT — both on the retail side and carving out a niche in the merchant banking sector. IBL, he said, does not intend to establish commercial and retail branches all over the country. Unlike other financial institutions, he thinks Intercommercial has developed a unique business model which, he says, will revolutionise banking services in TT.

The model was developed by the IBL’s new general manager, V Ravishankar, who joined the group from ICICI Bank of India in February. When pressed about it, he said it involved an interesting mix of technology with a small number of banks, tentatively between four to six, in a hub and spoke arrangement. Hinkson said such a mix has proven successful in ICICI’s operations in India and in the operations of other financial institutions, such as the Bank of Mauritius.Turning to merchant banking, Hinkson said ITMBL’s research has shown that this sector of the economy is expected to be very competitive over the next three to five years.
This point was underscored by Central Bank Governor Ewart Williams during the launch of ITMBL at the Courtyard Marriott Hotel in Invaders Bay last month.
Williams said the launch of ITMBL was very timely because it was taking place during the full impact of financial sector liberalisation and was being reflected in the proliferation of a diversified range of financial institutions and the exponential growth in the financial asset base.

He further indicated that ITMBL’s decision to participate in TT’s burgeoning capital market reflected the foresight of the company. Such a market, he told guests, was now rivalling the traditional banking sector institutions as a preferred source of business financing.
“There is more than adequate market space for merchant banks to come in and carve out some niches and grow over time,” he stated. Hinkson conceded that a career in banking was the furthest thing from his mind while he was completing management studies at UWI during the late 1990’s. He was encouraged to enter the world of banking by a friend, after he returned home upon completion of his MBA at Georgia State University in Atlanta, USA. “It sounded like the kind of environment I would like to get into,” he stated.

Hinkson’s first foray into the financial world started in 1999 when he joined Citibank as risk manager and eventually rose to the post of Asst Vice-President, Country Risk Head, in the Bahamas.
He described his stint there as “getting in and learning” the ropes. In 2004, Hinkson joined the AIC Merchant Bank as assistant vice president, Origination, where he stayed for 18 months, and was eventually promoted to vice-president responsible for origination and deal closure.
During his tenure there, Hinkson’s portfolio included the origination and execution of both US and TT denominated debt and equity transactions in excess of $725 million — with very limited underwriting capacity, he added.

On ITMBL’s ability to woo customers, Hinkson identified equity — linked notes and trade finance as two of ITMBL’s premier products. During the bank’s launch in February, debt arranging and underwriting, commercial paper, equity arranging and underwriting of Initial Public Offerings (IPOs), private placements, cross listings and rights issues were identified as ITMBL’s main areas.
He expressed confidence that ITMBL’s enhanced merchant banking operations will bring in significant streams of revenue and business opportunities for the group over time and where savings can be passed on to clients.

On ITMBL’s plans for expansion, Hinkson said the group has identified TT, Jamaica, Barbados and the nations of the Organisation of Eastern Caribbean States as its primary markets in the Caribbean. Northern Caribbean countries — the Bahamas and Cayman Islands — and the Dutch Caribbean are listed as secondary markets for ITMBL.
He said while IBL will not be venturing into Central America just yet like other local financial institutions such as RBTT, there is a possibility that IBL could take advantage of business opportunities in India through its association with ICICI.