Today, we publish the seventh of 15 stories on the nominees for the Jamaica Observer Business Leader Corporate Award. To be considered for nomination, all companies had to be at least 50 years old, or be able to trace their roots to 1962 or before. The award presentation and announcement of the Business Leader Corporate will take place on Sunday, December 2 at the Jamaica Pegasus hotel in Kingston.
For the Rev G Downer, former rector of the Kingston Parish Church and his like-minded colleagues, homeownership was an obvious starting point.
Downer, along with the Reverend A H Neito and William Malabre drew on the template that had been developed and burnished in England.
They encouraged anyone who was earning a wage to put away a small amount each week. They opened an office at 72 Water Lane, at the corner of Duke Street in Kingston; they even named the institution, in which the savings would be pooled for safekeeping, after the reigning queen -- Victoria.
The early success of this initiative that promised to put roofs over the heads of the impoverished blacks was a lesson in the sociology of slavery. The unflinching crave for homeownership drove Jamaicans to the building society with their two shillings and six pence.
Within a year, a whopping £2,392 ($4,784) had found its way into the vaults of this newly formed organisation.
The first manifestation of the transformative power of this small idea was when a schoolmaster from Portland bought the Windsor Plantation in St Thomas by tapping into a £100 ($200) loan from the mortgage provider.
In the 134 years since its first seeds were sown the Victoria Mutual Building Society (VMBS) has had an illustrious history of shaping the lot of thousands of Jamaicans. As a facilitator of homeownership, this institution remains today a timeless slice of the credo that guided its founding fathers.
For all their far-sightedness, the founders could not possibly have imagined the distance the institution that they founded in 1878 has travelled. Neither could they have comprehended the scale of its transformational impact, not only on individual homeownership, but in helping an ambitious and prideful society achieve a whole range of collective goals.
They would no doubt be brimming with pride.
VMBS has not fundamentally strayed from the mandate of its founding fathers. What the leaders have been doing for years, but have accelerated over the past decade, is leverage the society's huge customer base to create a harmonious and synergistic financial services network.
By the last count, VM had 600,000 customers — that's a sizeable portion of the country's adult population. Up to the end of 2011, the group had a mortgage portfolio of $27.55 billion and savings of $53.3 billion. It is also profitable — netting $2 billion in 2010 and $913 million last year. It has accumulated $8.8 billion in net worth.
The expansion over the past 20 years has been nothing short of staggering, with two of the leading and most critical growth indicators increasing exponentially — mortgages jumping from $1.4 billion and savings from $2.8 billion.
Where this building society does not touch the lives of Jamaicans, by facilitating their home acquisition, it reaches them through a slew of other services that it has been rolling out in the marketplace over the last two decades.
Through a wholly owned publicly listed subsidiary called Victoria Mutual Wealth Management Limited, those seeking advice on how to maximise their asset values have a place to which they can turn. Stock brokering and bond trading are also part of the services offered.
Another subsidiary, Victoria Mutual (Property Services) Limited, provides a full range of real estate services including brokerage, property valuation and management; while inbound money remittance services are directed through VMBS Money Transfer Services Limited. The building society is also an authorised foreign exchange dealer.
The group has in place a well-structured network through which it delivers its services to Jamaicans all over the world. It has 15 branches throughout the island, and operates representative offices in large overseas metropolitan centres with high concentration of members of the Jamaican diaspora.
From these cities — London, Birmingham, and Manchester in the United Kingdom; Toronto in Canada; and Miami Gardens, Florida, USA — it is building a thriving business in inbound remittances.
In the housing market, VMBS' impact has traditionally, and to date primarily been felt through the long-term mortgages it extends to individual homeowners. Obviously, without institutions like VM priming the effective demand of a housing- deficient population, construction activities could never be a sustainable economic pursuit.
But the mortgage provider has also extended its involvement to the short-term end of the market, both as an investor and lender. During the 1990s, it partnered as an investor with developers to bring some major housing projects to fruition. These include 686 housing units in Braeton, St Catherine, that were spearheaded by Gore-Tuca Ltd; the 90-unit Llandilo development; and in Kingston, 65 units between Brompton West, and on Lady Musgrave Road, Kingsvale Townhouses.
Also, VM has underwritten the development of several of Kingston's well-known apartments. Among them: Wellington Glades, Dilsbury Meadows, Merrivale Apartments, Stanmore Estates, and Mountain Terrace.
This organisation has grown over the years by being responsive to market signals as exemplified by the slew of services it now offers. Importantly, it has adopted a least-cost approach to bringing these latest services to the market — essentially laying them on top of the infrastructure that it already has in place to meet the needs of its mortgage business.
In other instances, it takes a portfolio stake in institutions that are already well established and in which it can reap synergy, as was the case in the purchase of 20 per cent of Prime Asset Management Ltd in 2008. Prime Asset is a major provider of pension fund investment and administration.
Another example is the May 2010 transaction in which VM traded-in all of its shares in its insurance subsidiary for a 31.5 per cent stake in British Caribbean Insurance Company.
But in pursuit of growth, this group has not always got it right. Its most calamitous setback came during the late 1990s at the height of the country's financial sector meltdown. Island Victoria (commercial) Bank, in which VMBS was a 50/50 partner with Island Life Insurance Company, buckled under the weight of a mountain of bad debt. Not only was the unravelling of its subsidiary an unbearable public embarrassment to the usually conservative VMBS, it came close to dragging down the building society in much the same way as it succeeded in pulling the weaker partner under water.
Importantly, VM emerged from a Government-led liquidity package as a more resilient and streamlined organisation.
In the period since Independence, VM has continued its long tradition of aligning its institutional interest with broader national goals. In fact, by Independence this mortgage provider had for eight years been offering 20-year loans with interest rate calculated on the reducing balance.
In 1962, it responded to an initiative by the country's newly elected prime minister, Sir Alexander Bustamante, to provide housing for the typically unbankable Jamaicans by subscribing £10,000 to the pool.
In 1971, the lender provided long-term funding for co-operative housing — helping the development of Mountain Terrace Co-operative housing scheme. Its mortgage financing for low-income units in Trench Town and Central Housing schemes were pioneering moves that set the stage for the future expansion of this kind of housing development.
Over the years, VMBS has been big on corporate sponsorship, funding among other events, the annual Boys' and Girls' Athletics Championships for 14 years.
It has even been willing to co-operate with its main rival — Jamaica National Building Society, another nominee for the Business Leader Award — for the greater public good. So in February 2008, both mortgage providers joined forces to create the Mutual Building Societies Foundation. This programme is aimed at supporting the Government's plans to transform education.
This move would sit well with the founding fathers of this organisation.
Moses Jackson is the founder and convenor of the Jamaica Observer annual Business Leader Award programme. He may be reached at moseshbsjackson@yahoo.com
IN the years following Emancipation a group of enlightened clergymen began sharing thoughts on how they could help lift the lives of the first generation of Jamaicans born out of slavery.
Victoria Mutual Centre on Half-Way-Tree Road.
   Victoria Mutual Centre on Half-Way-Tree Road. #slideshowtoggler, #slideshowtoggler a, #slideshowtoggler img {filter:none !important;zoom:normal !important}  1/1  |
Downer, along with the Reverend A H Neito and William Malabre drew on the template that had been developed and burnished in England.
They encouraged anyone who was earning a wage to put away a small amount each week. They opened an office at 72 Water Lane, at the corner of Duke Street in Kingston; they even named the institution, in which the savings would be pooled for safekeeping, after the reigning queen -- Victoria.
The early success of this initiative that promised to put roofs over the heads of the impoverished blacks was a lesson in the sociology of slavery. The unflinching crave for homeownership drove Jamaicans to the building society with their two shillings and six pence.
Within a year, a whopping £2,392 ($4,784) had found its way into the vaults of this newly formed organisation.
The first manifestation of the transformative power of this small idea was when a schoolmaster from Portland bought the Windsor Plantation in St Thomas by tapping into a £100 ($200) loan from the mortgage provider.
In the 134 years since its first seeds were sown the Victoria Mutual Building Society (VMBS) has had an illustrious history of shaping the lot of thousands of Jamaicans. As a facilitator of homeownership, this institution remains today a timeless slice of the credo that guided its founding fathers.
For all their far-sightedness, the founders could not possibly have imagined the distance the institution that they founded in 1878 has travelled. Neither could they have comprehended the scale of its transformational impact, not only on individual homeownership, but in helping an ambitious and prideful society achieve a whole range of collective goals.
They would no doubt be brimming with pride.
VMBS has not fundamentally strayed from the mandate of its founding fathers. What the leaders have been doing for years, but have accelerated over the past decade, is leverage the society's huge customer base to create a harmonious and synergistic financial services network.
By the last count, VM had 600,000 customers — that's a sizeable portion of the country's adult population. Up to the end of 2011, the group had a mortgage portfolio of $27.55 billion and savings of $53.3 billion. It is also profitable — netting $2 billion in 2010 and $913 million last year. It has accumulated $8.8 billion in net worth.
The expansion over the past 20 years has been nothing short of staggering, with two of the leading and most critical growth indicators increasing exponentially — mortgages jumping from $1.4 billion and savings from $2.8 billion.
Where this building society does not touch the lives of Jamaicans, by facilitating their home acquisition, it reaches them through a slew of other services that it has been rolling out in the marketplace over the last two decades.
Through a wholly owned publicly listed subsidiary called Victoria Mutual Wealth Management Limited, those seeking advice on how to maximise their asset values have a place to which they can turn. Stock brokering and bond trading are also part of the services offered.
Another subsidiary, Victoria Mutual (Property Services) Limited, provides a full range of real estate services including brokerage, property valuation and management; while inbound money remittance services are directed through VMBS Money Transfer Services Limited. The building society is also an authorised foreign exchange dealer.
The group has in place a well-structured network through which it delivers its services to Jamaicans all over the world. It has 15 branches throughout the island, and operates representative offices in large overseas metropolitan centres with high concentration of members of the Jamaican diaspora.
From these cities — London, Birmingham, and Manchester in the United Kingdom; Toronto in Canada; and Miami Gardens, Florida, USA — it is building a thriving business in inbound remittances.
In the housing market, VMBS' impact has traditionally, and to date primarily been felt through the long-term mortgages it extends to individual homeowners. Obviously, without institutions like VM priming the effective demand of a housing- deficient population, construction activities could never be a sustainable economic pursuit.
But the mortgage provider has also extended its involvement to the short-term end of the market, both as an investor and lender. During the 1990s, it partnered as an investor with developers to bring some major housing projects to fruition. These include 686 housing units in Braeton, St Catherine, that were spearheaded by Gore-Tuca Ltd; the 90-unit Llandilo development; and in Kingston, 65 units between Brompton West, and on Lady Musgrave Road, Kingsvale Townhouses.
Also, VM has underwritten the development of several of Kingston's well-known apartments. Among them: Wellington Glades, Dilsbury Meadows, Merrivale Apartments, Stanmore Estates, and Mountain Terrace.
This organisation has grown over the years by being responsive to market signals as exemplified by the slew of services it now offers. Importantly, it has adopted a least-cost approach to bringing these latest services to the market — essentially laying them on top of the infrastructure that it already has in place to meet the needs of its mortgage business.
In other instances, it takes a portfolio stake in institutions that are already well established and in which it can reap synergy, as was the case in the purchase of 20 per cent of Prime Asset Management Ltd in 2008. Prime Asset is a major provider of pension fund investment and administration.
Another example is the May 2010 transaction in which VM traded-in all of its shares in its insurance subsidiary for a 31.5 per cent stake in British Caribbean Insurance Company.
But in pursuit of growth, this group has not always got it right. Its most calamitous setback came during the late 1990s at the height of the country's financial sector meltdown. Island Victoria (commercial) Bank, in which VMBS was a 50/50 partner with Island Life Insurance Company, buckled under the weight of a mountain of bad debt. Not only was the unravelling of its subsidiary an unbearable public embarrassment to the usually conservative VMBS, it came close to dragging down the building society in much the same way as it succeeded in pulling the weaker partner under water.
Importantly, VM emerged from a Government-led liquidity package as a more resilient and streamlined organisation.
In the period since Independence, VM has continued its long tradition of aligning its institutional interest with broader national goals. In fact, by Independence this mortgage provider had for eight years been offering 20-year loans with interest rate calculated on the reducing balance.
In 1962, it responded to an initiative by the country's newly elected prime minister, Sir Alexander Bustamante, to provide housing for the typically unbankable Jamaicans by subscribing £10,000 to the pool.
In 1971, the lender provided long-term funding for co-operative housing — helping the development of Mountain Terrace Co-operative housing scheme. Its mortgage financing for low-income units in Trench Town and Central Housing schemes were pioneering moves that set the stage for the future expansion of this kind of housing development.
Over the years, VMBS has been big on corporate sponsorship, funding among other events, the annual Boys' and Girls' Athletics Championships for 14 years.
It has even been willing to co-operate with its main rival — Jamaica National Building Society, another nominee for the Business Leader Award — for the greater public good. So in February 2008, both mortgage providers joined forces to create the Mutual Building Societies Foundation. This programme is aimed at supporting the Government's plans to transform education.
This move would sit well with the founding fathers of this organisation.
Moses Jackson is the founder and convenor of the Jamaica Observer annual Business Leader Award programme. He may be reached at moseshbsjackson@yahoo.com