Skip to content

Industry News

Portland Private Equity Invests in Bermuda’s Clarien Bank

24 April 2016

(Jamaica Observer) Group Ltd (CGL), owner of Clarien Bank Ltd in Bermuda that shareholder Edmund Gibbons Ltd and new investors Portland Private Equity (PPE) will be re-seeding the company with an additional US$12.6m for its banking operation.

The bank said on its website that the additional injection of capital positions Clarien for “substantial growth opportunities and sustained profitability in the future as it looks to leverage the broad PPE and Edmund Gibbons Ltd networks”.

PPE’s head offices are in Burlington, Ontario, Canada, with regional offices in Kingston, Jamaica, and Bridgetown, Barbados.

Michael Lee-Chin, Chairman of Portland Holdings, PPE and NCB, was quoted on Monday as saying, “Our investment in Clarien and Bermuda continues the strategic expansion of our regional interests…We are excited by our partnership with Clarien and we look forward to working with their management team to develop opportunities and growth both within the Caribbean region and beyond.”

Robert Almeida, managing partner, Portland Private Equity, told the

Jamaica Observer via e-mail that the investment was made into the parent company of Clarien Bank. He declined to indicate the shareholding acquired.

“The amount and terms of this investment are private to the parties… We believe in building strong indigenous businesses, just like NCB. In this investment, we are co-investing with the Gibbons family, one of most prominent and successful families in Bermuda. Our mission is to make Clarien the leading Bermuda bank,” he stated.

Two years before, in early 2014, Clarien Bank emerged from the rebranding of Capital G Bank Ltd. The move includes all of Capital G Bank Ltd’s subsidiary companies, including Capital G Investments Ltd, Capital Trust Ltd, Capital G BSX Services Ltd, CGI Nominees Ltd and Capital G Brokerage Ltd.

On Monday, James Gibbons said in the bank’s release on its website that the cash injection with Portland transaction is a significant development for Clarien in terms of capital and strategic growth.

“In addition to exceeding regulatory capital requirements under Basel III, it will enable us to not only invest further in world-class financial products and services but also to access Portland’s wealth management capabilities and expand our offerings into regional and global markets.”

For the year ended 31 December 2015, Clarien Bank reported a net profit of US$0.5m, a similar figure to the previous 12 months.

Non-performing loans, being loans past due by 90 days or more, plus impaired loans, represented 14 per cent of the bank’s total loan portfolio at 31 December 2015, of which eight per cent, or US$71.2 million, were impaired, up from seven per cent a year ago. Provisions against impaired loans increased from US$18 million in 2014 to US$20.7 million in 2015.

The bank said it was optimistic about improving loan quality, stating, “Over the past 12 months we have seen a trend in clients using cash to pay down mortgages in order to avoid continued debt. The loan portfolio reduced US$66.8 million from US$876.5 million at December 31, 2014 to US$809.7 million at December 31, 2015.”

Clarien added in information on its website that during 2015 underlying earnings were supported by a US$4.5 million reduction in operating expenses to US$47.6 million, which was nine per cent lower than the previous year’s figures of US$51.1 million. The reductions, the bank said were achieved through substantial savings on professional fees, improved office efficiencies, disciplined budgeting and a US$1.9 million reduction in salaries and benefits.

Almeida told

Caribbean Business Report, “We believe in building long-term businesses. We are investors, not traders. That was our perspective with NCB; that is our perspective with Clarien; that is our perspective with all our businesses. The Gibbons family shares this long-term perspective.

“We invest based on reality, not perceptions. We invested in NCB at a time when there were negative perceptions, notwithstanding that the Jamaican financial sector was coming out of a crisis. We are investing in Clarien at a time when we believe that Bermuda has turned the corner and we can help it grow. Our investment in Clarien is not only a tangible sign of our confidence, but also demonstrates our commitment to actively contributing to the resumption of growth in Bermuda.”

Portland Private Equity has been instrumental in the turnaround of Jamaica’s largest bank, National Commercial Bank (NCB), which last year reported net profit of $12.3 billion.

In relation to PPE’s hopes for Bermuda, Almeida added, “We are active, not passive. In addition to Portland Private Equity, the Portland platform includes other members of the Portland group (for example, Portland Investment Counsel in Canada, NCB in Jamaica and, in the future, Guardian Holdings in Trinidad, etc), our investors (which include European Investment Bank, International Finance Corporation, Export Development Canada, etc) and our extensive network of relationships. We will seek to bring the full power of this platform to create synergies that will help Clarien and the other members of the group better serve their clients’ needs.”

PPE has launched a 2014 vintage successor fund, Portland Caribbean Fund II, and has continued its emphasis on the financial services, energy (including renewables), and telecommunications sectors. Limited partners in PPE’s funds include US State pensions, US and Caribbean corporate pensions, insurance companies, multilateral institutions, and the general partner team.