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Sunday Times
Interview
29 July 2008
It
has been a momentous week for Global Capital which made two
important announcements after its annual general meeting on
Thursday. Briton Nicholas Ashford-Hodges, a director since 2003,
has been named group chairman, taking over from Christopher J.
Pace, who founded the original Globe Financial Management in the
late 1980s. That company was listed on the Malta Stock Exchange
in 2001 and rebranded as Global Capital in 2006.
 Mr
Hodges’ tenure at the helm will steer the diversified group into
new waters. Chief executive officer Niki Portelli told the AGM
that “becoming a one-stop shop in financial services remains our
main objective”. To consolidate this business model, Global
Capital is to venture into banking to develop more services to
offer to its 60,000 current clients and attract new customers.
“We are positioning ourselves for banking,” Mr Hodges, 58, says.
“If you look at all the services Global Capital offers today
(life insurance, health insurance, investments), they all
actually revolve around banking. Our services generate much
business for banks in terms of transactions and volume. It is
business that is going to competitors. So Global Capital’s
vision as regards banking fits naturally with our long-term
objectives.
“This is a five-year project but we expect to see results much
earlier. Hence the confidence we have in our organisation. We
have to ensure that there is business growth because at the end
of the day we are committed to adding value to our share price.”
On
April 16, Global Capital agreed terms for the acquisition of
85.5 per cent of the issued share capital of Medifin Holding
Limited which held 99.9 per cent of the issued share capital of
Mediterranean Bank plc.
The complex process, including due diligence and regulatory
approval, is not done and dusted yet, but Mr Hodges –
understandably reticent given the sensitivity of the new venture
– says preparations are already underway as far as the precise
nature of the structure is concerned.
London-based Hodges, who says his chairmanship of Global Capital
will be “supportive”, brings years of experience in the field
with him. Currently vice-chairman of British American Investment
Co (Mauritius) Ltd, he is chairman of its operations in Kenya,
British American Investment Company Ltd, and its subsidiaries,
with a key stake in Equity Bank, Kenya’s fastest growing bank,
capitalised to the tune of $2 billion. He is also director of
British American Insurance Co (Mtius) Ltd and several other arms
of British American Group (BAG).
BAG holds 48.45 per cent shareholding in Global Capital; the
group employs 3,500 employees and last year generated a
consolidated turnover of almost $400 million.
It
has long-standing ties with Malta. Founded in the Bahamas in the
1920, British American expanded steadily “by following the
British flag around the Commonwealth”. A small insurance
business was established in Malta in the mid-1960s but it only
began to witness significant growth in the 1990s. British
American acquired the local BUPA agency in the late 1990s, and
talks with Globe led to agreement in 2001. The merger took place
in 2003.
“The merger has been a success,” Mr Hodges points out. “The two
groups have blended together under a single management structure
and we have seen significant growth, particularly in the life
company which has grown five-fold since. There was rapid
progression in terms of volume and profits until 2006. In 2007,
there was a bit of a reversal, mostly because of the markets and
the worldwide factor affecting investment service companies.”
Mr
Hodges explains that Global Capital now has a five-year vision
to implement across all of its structures.
“The vision is to develop what we already have. The original
concept of the merger with Globe created a one-stop shop in
terms of investment and insurance services. We have identified
our missing link. The financial services sector here is
dominated by banks. If you are not present within that sector
you are at a competitive disadvantage. We want to enter the
sector to service our clients better. And not necessarily in
Malta alone. We are involved in other sectors where British
American is present, notably Mauritius and Kenya, so there are
synergies we can develop as well.”
Mr
Hodges admits the world economy is fragile but is confident that
the banking sector in Malta is adequately shielded from the
sub-prime crisis. On the other hand, he points out, there is the
opportunistic element of entering a sector during a downturn.
He
is, however, especially confident in the expertise within Global
Capital’s ranks: “Our life fund has grown remarkably but the
competence behind that lies in the funds’ management, how you
invest money and where. That’s where the synergy lies.”
Mr
Hodges, a father of four, has been visiting Malta since 1992,
originally in connection with British American business. He says
he will fly over more frequently now and is looking forward to
working more closely with the Global Capital team.
At
the AGM on Thursday, GlobalCapital announced a pre-tax profit
for the period ended December 31, 2007 of €353,743. Life
insurance business in 2007 was up 30 per cent to €12,634,260.
Agency and brokerage services registered a 49 per cent increase
in turnover and totalled €1,908,330. The group’s property arm,
boasting a diversified worldwide portfolio, saw turnover rise
significantly to €1,091,593 from €186,196 in 2006.
The AGM also approved a share option scheme for Global Capital
employees.
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