C&WJ credit union to buy back some shares
Published:Wednesday | November 17, 2021 | 12:06 AM
Community & Workers of Jamaica Co-operative Credit Union Limited, C&WJCCUL, will be buying back as much as 10 per cent of its listed deferred shares, amounting to some 45 million units, starting the first week of December.
At today’s price, the credit union would be pouring up to $72 million into the buy-back.
C&WJCCUL made history in July 2020 when it listed 450 million deferred shares that initially offered investors a fixed return of 7.35 per cent for 24 months on five-year and 10-year instruments, but is now adjusted at intervals by the credit union.
The listing of the stock, which was sold at $2 per share, allows credit union members who participated C&WJCCUL’s private offer in June 2018 to trade their shares with non-members via the market.
The shares are now 20 per cent cheaper than when they listed last year.
C&WJCCUL said in a market filing that the buy-back is in line with previously stated goals of ensuring value for investors by the repurchase of undervalued shares from time to time.
The credit union will conduct the buy-back on the open market using cash from its holdings, which up to September was about $3 billion.
The community bank, which has made 50 per cent less profit or $126 million so far over the period January to September, which it largely blames on a significant increase in provision for credit losses on the loan portfolio, is also focused on growing its own returns.
CEO Carlton Barclay has been tweaking products and services in response to changes caused by the pandemic. Recently, the credit union introduced a new loan product to the market called ‘Own It’ which is targeted at potential homeowners.
The share buy-back is set to begin on December 3, but has no specific end-date. It will run until the credit union gets to the desired 10 per cent, Barclay told the Financial Gleaner. The price paid will be determined by the current market value at the time of each transaction, he said.
The credit union also advised the market that would retain the right to decline any above a particular ceiling, an undisclosed figure that is determined internally and at intervals by C&WJCCUL.