Christmas will come a little early this year for Cayman National Corporation shareholders who will be receiving an interim dividend this month.
‘Yesterday, we started mailing out the interim dividend cheques to shareholders,’ said CNC president and CEO Stuart Dack on Thursday.
Mr. Dack said the six-cents-per-share interim dividend comes at a time of many positive developments for CNC, which include record profits; the finalised sale of 51 per cent of Cayman General Insurance to the Sagicor-owned Life of Jamaica Limited; the announcement of Cayman National Bank’s expansion to the Countryside Shopping Village in Savannah and to the Financial Centre in Camana Bay; and the receipt of Cayman’s Bank of the Year award by The Banker.
Although he could not give the precise figures until the financial year-end accounting has been finalised, Mr. Dack said CNC would show record profits this year.
‘We would expect to make that announcement late this month or in early January,’ he said.
As an indication of the performance, however, Mr. Dack said CNC had a third quarter profit of $13.2 million, which was 69 per cent ahead of last year.
In addition to the interim dividend, Mr. Dack said he expects a similar dividend to be issued after the Annual General Meeting in early 2006.
One of the most challenging aspects of the year for CNC was recently resolved.
The sale of 51 per cent of Cayman General Insurance, formerly a CNC subsidiary, has been finalised, with CNC maintaining a 24.2 per cent stake in the company.
Mr. Dack said the sale was a necessary step for CNC.
‘We felt it was important not only because it brought into the company money to build capital,’ he said, ‘but also, for reasons of strategic risk control, we felt it was important to reduce our holdings in the insurance industry.’
Mr. Dack thinks the sale was a great result for everyone.
‘The prospects of CGI going forward are very, very strong,’ he said, noting that the company is now part-owned by a well-established insurance company, part-owned by CNC, and part-owned by the Cayman Islands Government.
‘CGI has to be one of the strongest companies on the island, and it will provide a very attractive option on the insurance market.’
After questions about CGI’s ability to pay Hurricane Ivan claims and recapitalise afterwards, international insurance rater AM Best downgraded the company’s rating. Later, CGI voluntarily withdrew from the rating system.
Now, with a new majority shareholder, and with only about $3 million of outstanding Ivan claims out of close to $300 million, CGI is in discussions with AM Best about reinstating the rating, Mr. Dack said.
Another noteworthy development for the CNC has been Cayman National Bank’s announcement of planned expansions. Mr. Dack said the move to Countryside Shopping Village is an important one.
‘We were already the only bank with a presence in the Sister Islands, and now we’ll have one in the Eastern Districts,’ he said.
Mr. Dack said the expansion into the master planned community of Camana Bay puts the bank in a very powerful position.
All of the positive developments mean good things for CNC shareholders, Mr. Dack believes.
CNC shares dropped in value after Hurricane Ivan, bottoming out around $2 per share. Recently, however, the value has moved up to around $2.25, Mr. Dack said.
‘I think potential investors have waiting to see if an interim dividend would be paid, and what the year-end results would be,’ he said.
‘As an organisation, there are several positive factors about this business with a 30-year pedigree,’ he said. ‘We sustained an event on the magnitude of Ivan and not only survived, but came out positively.’
While Mr. Dack could not comment about the possible performance of CNC shares in the future, he did say there would be a change in the way investors could buy those shares.
‘We’re pushing ahead with plans to start trading our shares on the local exchange,’ he said.