Staff adjustments,merged operating unit underpin VM redesign

A restructuring programme under way at the Victoria Mutual Group, a building society with tentacles in other areas of the financial sector, will combine some jobs, create new posts and eliminate others, but it's all meant to position the company for growth, according to President and CEO Courtney Campbell.

With that in mind, the branch network will stay intact, he said in an interview on Wednesday.

The review is being done department by department, but as to the overall number of jobs to be eliminated from VM's 680 workforce, Campbell said it was too early to say as the reorganisation was ongoing.

"We also created some new roles because we are placing emphasis on some new areas. For example, earlier this year, we combined the risk department with the legal and compliance department to get better synergies and more effectiveness - that's just one example," the VM boss said.

"We are in a growth mode right now; we are not cutting back and will not be closing branches. Organisations review their structure from time to time to ensure that we are being as efficient and as productive as we need to be in these times. That's what we are doing," he said.

Campbell took over as the boss of the VM Group in April 2016. Within that time, he has reshaped the team at VM and its main subsidiaries; rebranded the pension fund arm to align with the VM name; revived, reorganised and relaunched an investment subsidiary that last year was floated on the stock exchange, becoming the first and only VM business to list on the market.

Campbell says the main initiative since his tenure dealt with amendments to the society's rules, which were unchanged for 30 years.

"They were approved at the annual general meeting in August 2017 and will allow us to introduce many more new products to the market," he said. "Now, we are able to do personal loans, auto loans, credit cards, and so on. We will be able to roll these out in the ensuing months."

Now, as the group continues the "ongoing process of redesigning its operations", VM will turn its attention to setting up a core unit that will combine operational functions across the group under a single unit.

"We are establishing a group operations function to serve the entire group, to provide back-office operations for all, instead of the building society having one operations area, wealth having one area, pensions having another. We are also ensuring that best practices are applied right across the enterprise," Campbell told the Financial Gleaner.

Positioned for growth

Campbell frames the changes as positioning for growth. They come amid solid performance by the core building society operation, which nearly tripled its profit last year. Campbell said all the subsidiaries delivered improved performances in

2017 as well, including VM Investments, VM Pensions, VM Property Services and VM Money Transfer.

The society, VMBS, made a net profit of $1.74 billion, but profit for the overall group was sharply lower at $1.03 billion. Explaining the disparity, Campbell said the society booked a gain from the winding up of its subsidiary Westin in the Cayman Islands, but the gain was eliminated for the group.

"It's just good accounting," he said. "When you consolidate, have to eliminate the gain. It was an internal company closed, not money coming from outside."

Group profit was up by $133 million for the year from $856 million.

The biggest cost centre across the group related to salaries, on which VM spent $3.15 billion, up from $2.5 billion the previous year.

In the wake of those numbers, during April, VM Group invited staff to apply for voluntary separation.

"As to savings, it's too early to say. The specific plans have not been finalised as yet, so we are not able to comment on the impact of the exercise. We are just in the planning stages," said Campbell.

"We expect the new structures to take effect by the beginning of June. By that time, I will be able to speak with more clarity. The new structures for the various units, organisational charts, will become effective on June 1."

Pleased with performance

Campbell is pleased with the group's overall performance in 2017 - the mortgage portfolio grew by more than 20 per cent; its market share expanded by a per cent; and loan disbursements climbed 78 per cent.

"We feel very upbeat about what is happening in the business," he said. "The good news, too, is we have revamped the processing of mortgage applications, so the turnaround time is now much improved compared to two years ago ... we have the only online mortgage portal in the Caribbean which is working well, as well."

Last year, VM invested just over $868 million in capital expenditures, or capex. This year, one of the big capex projects will be an upgrade to the online banking platform for which VM is "negotiating the budget with the vendors now"; as well as the introduction of a mobile banking app by the fourth quarter; and upgrades to the ABM network, including the introduction of intelligent ABMs by the third quarter.

VMBS, which has operations both in Jamaica and overseas, is the larger of the only two remaining building societies in Jamaica, with more than $105 billion in assets and $77 billion in savings. The larger VM Group has $123 billion in assets.

avia.collinder@gleanerjm.com