ANSA Merchant Bank...growth in a recession

ANSA Merchant Bank Ltd is doing what few other successful businesses do during an economic downturn – investing in its products and people – to grow its market share and capitalise on opportunities that arise.

Business Day sat down with the bank's managing director Gregory N Hill recently to find out more about its expansion plans.

Seated in the conference room at the bank's head office, ANSA Centre, 11B Maraval Road, Port of Spain, Hill compared ANSA Merchant Bank's current business philosophy to that of internet retail giant, Amazon, during a similar economic recession in the United States.

"Amazon started out as a book retailer and now they are one of the biggest global companies, selling a wide range of products now in addition to their original print and eBooks. Amazon took the time during a down-cycle to double-down and re-visit their business model to see how they could expand and diversify.

"Likewise, in tough economic cycles, the bank and our parent company – the ANSA McAL Group – use this environment to look for opportunities to grow and expand. So we are expanding our business, we are hiring and we are in a great position to do that, because when you look at our market share, there's a lot of room for us to increase our share of customers' wallets.

"There's also room to increase our share of business transactions locally and regionally. That's why we are re-tooling and bringing on-board the right team members who have that entrepreneurial spirit, that drive, to grow the business in a tough economic cycle."

ANSA Merchant Bank has several key subsidiaries:

• Trinidad and Tobago Insurance Ltd (TATIL);

• TATIL Life;

• Consolidated Finance – a licensed finance company and merchant bank in Barbados;

• Brydens Insurance – a branch of TATIL in Barbados.

Referencing the bank's results for the financial year ended December 31, 2017, Hill noted that in a "market that has contracted significantly, our profit before tax maintained a robust position of $314 million in 2017, just about two per cent shy of the $322 million delivered in 2016, while total operating income increased to $982 million in 2017 or by a significant 21 per cent. That's just below $1 billion in top-line income.

"Our net operating income also increased by nine per cent year-on-year to $582 million, up from $533 million in 2016. So both top line and net operating income increasing materially, in what was a down-cycle year for the country. This alone provides significant evidence that the core business is growing. Also, our banking business alone produced an increase of six per cent in profit before tax at $214 million in 2017, up from $201 million in 2016.

"Looking at TATIL," he added, "TATIL has been expanding its market share significantly. Both motor and property are doing very well and premium income is up by nine per cent. TATIL Life delivered a significant 27 per cent increase over 2016, as it expanded its market share in all of its products and services, especially mortgages."

Hill told Business Day:

Always striving to do better, the bank has made a "significant investment" in a new information technology (IT) system, one which Hill said will improve both back-end operations and customer service quality delivery. "We are investing heavily in a new IT full banking core platform. A very state-of-the-art system which will be the core of our banking operation. It is going to be used both here in TT and in Barbados to streamline and support all of our business initiatives. On the front-end, this will mean new products and exciting ways for our loyal customers to interact with us."

While Hill declined to preview these new products just yet, he did say the bank is "restless when it comes to innovation and this new technology will give us the tools to be able to continuously innovate."

Noting that innovation alone does not ensure success, Hill said the bank has recognised that to grow its market share requires being "top of mind" with clients.

"To do that, we must provide great service and an excellent customer experience. This requires core processing systems that help us deliver great service through the channels that we already have and through the new channels that we're opening.

"Both TATIL and TATIL Life are also investing heavily in their IT infrastructure and this will position both companies to be on the cutting edge of the insurance industry locally.

"In essence, we're setting the stage and the platform for growth in our banking and insurance business. We're doubling down and making these investments in people, premises, systems, products and innovation, all during an economic downturn, so that we are ready for any and all opportunities which present themselves now and when we are in an economic upswing."

One such opportunity saw the bank establishing a wealth management division in mid-2017. The bank is set to mark this division's first anniversary by opening a new executive wealth management office in the TATIL building located next door.

"The market has responded quite favourably to our wealth management business. We've been in asset management for many, many years – we manage many investment portfolios, multiple pension plans, we have four mutual funds, one of which was the top-performing mutual fund in 2017 – the TT Income Fund which delivered a return of 3.76 per cent – which was the highest TT dollar return in the country for similar funds.

"So we received quite a lot of requests to provide investment advice to high net worth individuals and people looking to preserve inter-generational family wealth. Based on that we agreed to respond to the demands of our clients and widen our asset management suite of products to include private wealth management services.

"Our new wealth management office will take up the majority of the fifth floor of TATIL building. The space will be completely modern and very high-end. We're spending significantly because we're investing in this business similar to how we invest our portfolios – we're investing for the long-term."

Expansion often requires more staff and ANSA Merchant Bank's wealth management division is no exception. Although the bank has "quite an extensive team in investments and wealth management," it is in a hiring phase, specifically wealth management advisers.

"We are looking to hire the best because we take this business seriously."

The bank is also expanding its auto-finance team in Trinidad and recently hired a new senior executive to lead this division and is also opening a new commercial lending office for Consolidated Finance in Warrens, Barbados in May. Likewise, TATIL Life is "growing its direct sales team, while TATIL General is bringing on significantly more agencies throughout the country."

Overall, ANSA Merchant Bank is expanding its operations significantly. Hill looks forward to executing these plans in the coming months.