Sagicor Ready for COVID-19 Storm
Via Jamaica Observer
Sagicor Jamaica is expressing confidence that it is capitally strong and highly liquid enough to ride out the COVID-19 economic contraction now on in earnest in Jamaica and across the globe.
President and CEO of Sagicor Group Jamaica Chris Zacca spoke about the group's strong capital position having amassed $140 billion in assets in addition to billions of dollars' worth of easily tradable securities both in hard currency and Jamaican dollars. Addressing a Zoom press briefing on Wednesday to announce details of the company's 2019 financials, Zacca sought to allay any concerns that Sagicor might buckle under the COVID-19 economic contraction.
On the contrary, Zacca declared that Sagicor is “strong and solvent” and well able to withstand the economic downturn being brought on by the COVID-19 pandemic.
He disclosed that the Sagicor group has undergone rigorous stress testing both long-term and short-term and has come out with flying colours. Stress testing is done to measure an institution's ability to withstand financial shocks.
“Everything we have done shows that our capital adequacy remains intact and that our liquidity position is manageable, so we feel very confident that we are gonna be able to ride out the worst-case scenario with COVID-19 in terms of the economic downturn and its effect on all the businesses in Jamaica,” Zacca explained.
He went on to emphasise that Sagicor has applied some strong scenarios in terms of negative effects “to ensure that we are prepared for every eventuality, and I want to reiterate that we are extremely confident of our capital and our solvency in any scenarios at this time”.
He stated most of Sagicor's $140 billion in assets is tied up in fixed income, which is easily tradable, noting that the Bank of Jamaica has already indicated to financial institutions a willingness to trade these assets for cash, if needs be.
Turning to the 2019 financials Zacca reported that Sagicor performed well in 2019, producing profit attributable to stockholders of $15.65 billion, equivalent to $4.01 per share, a 10 per cent improvement over the prior year. Stockholders' equity reached $91.25 billion, a 23 per cent growth for the year.
In addition to strong generic growth across major business lines, Sagicor expanded its investment in Property and Casualty Insurance with the acquisition of a 60 per cent interest in Advantage General Insurance Company.
Individual insurance continued its strong profitability performance contributing $5.37 billion to the group for the year, a 13 per cent improvement. Sagicor Bank contributed net profit of $3.04 billion which was seven per cent more than in 2018.
Revenues of $13.86 billion were 12 per cent more than the prior year, reflecting business expansion, trading gains and improved credit losses.