Barita Investments Limited (BIL) Earnings Call Transcript & Summary

Pleasant good afternoon to everyone joining us today, our shareholders, clients and the wider investment community. A very warm welcome to the Barita Beat, the pulse of our performance. This serves as our principal source of insights on our quarterly earnings and all pertinent information related to our financial performance and investment thesis. On behalf of the entire Barita team, we would like to acknowledge that this is our first briefing post Hurricane Melissa, and we do want to say that our hearts and prayers are with the entire country and particularly those who have been impacted by the hurricane. We don't take it lightly, and we are pleased to be able to share this platform with you today. We will be reviewing our recently published fourth quarter earnings ending September 30, 2025. I am Kerrie Baylis, the VP of Strategic Business Development and Investor Relations here at Barita, and I will also be the moderator for today's session. It is my pleasure to introduce the members of our executive team, who will be our keynote speakers for today's earnings call. Allow me to introduce Ramon Small-Ferguson, our Chief Executive Officer and Managing Director of Barita Unit Trust Management Company Limited. Also with us today is Dane Brodber, our CEO Designate for the Barita Financial Holding Group and Interim CEO for Cornerstone Trust and Merchant Bank. Also with us is Stephen Phillibert, Group Chief Financial Officer; and Richardo Williams, who is our Vice President of Asset Management and Research. Now the format of our presentation today will start with our 12 months financial performance, followed by a business review, which will include updates on our strategic priorities, the evolving market environment and some insights into the outlook for Barita as we head into our new financial year. As always, we look forward to the opportunity to hear directly from you. And so we will ask that during the presentation or any time thereafter that you please share any questions that you may have that you would like us to answer at the end of the presentation into the chat box, and we'll be very happy to answer them. Thank you very much again for taking the time to spend your afternoon with us. And at this point, I will hand over to Stephen, who will take us through our financial review. Thank you.

Thank you very much, Kerrie. I'll jump right into it. Good afternoon, shareholders and other guests. We'll start with a look at operating income for the for the full year ended September 30, 2025. So we have net operating income decreasing by $1.5 billion or 15% to $8.5 billion. It was around $10 billion, sorry, just under last year. That actually reflects what we have been indicating to you over time, that is to say we are shifting as it relates to our real estate-related activity within the alternative investments side of our business from the period in which we expect to see significant valuation gains in that portfolio to where we're now preparing ourselves to move into the development phase. So the anticipated trailing off of the valuation gains is what is reflected in the segment of the income that is downwards year-over-year, which is a gain on investment. So we're seeing a 43% decline there from around $4.9 billion in the prior year to $2.1 billion in the current year. Aside from that, our core activities are actually reflecting increases or improvement. So net interest income is up about 40%, $256 million to $903 million from $646 million in the prior year. And similarly, fees and commissions have improved to $4.2 billion from $3.7 billion in the prior year. Operating expenses overall reflecting a downward trend, down 7% to $4.6 billion from just under $5 billion in the prior year. That is chiefly driven by the reduction in our impairment or ECL expenses. So that's down just over $500 million. In the prior year, we had some particular provisioning that was done for items within the portfolio that had adverse indicators attaching to them. We didn't have a recurrence of that this year. And so that line item is materially down. As it relates to the other components, staff costs, a small increase, 2% to $1.69 billion, call it, $1.7 billion from $1.66 billion in the prior year. And administration costs are up not much more, about 4% to $2.8 billion from $2.7 billion in the prior year. The efficiency ratios noted there is increasing from 50% to 55%. And again, that's driven mainly by the change in revenue that is pertaining to the nonrecurrence of those valuation gains. As we look at the other key metrics on this chart, we're seeing net profit just over $3 billion, down from $3.8 billion in the prior year. Earnings per share following in lockstep with that, likewise, down 21% to $2.51 per share from $3.17 in the prior year. Key balance sheet metrics. Total assets sits at just under $150 billion from $142 billion in the prior year, which is a 5% upward trend. And as usual, that is overwhelmingly driven by our securities portfolio as represented by the combination of the pledged assets and the marketable securities lines. So those are totaling now to a little over $118 billion from $108 billion in the prior year, up 9%. We do have loans counterbalancing that somewhat down to $8.6 billion from $13.3 billion. Total liabilities, we have that increasing by 7% to $114.5 billion from $107 billion, and that is predominantly driven by the increase in our repurchase agreements to just over $90 billion from $ 84 billion, reflecting similarly that 7% increase. Other debt facilities, just a small 2% increase there. And likewise, very little change in the shareholders' equity at flat at about $35.3 billion. So in relation to capital, that has us sitting at just around the industry average and materially over 2x the requirement, the minimum requirement of the FSC. So we continue to be strongly capitalized. And then in closing, just a recap of some of the key metrics. The net operating revenue, as I noted before, $8.5 billion, net profit, $3 billion or just marginally above, shareholders' equity, $35.3 billion. Total assets just under $ 150 billion. The efficiency ratio sitting at just under 55% and the ROE and leverage at 8.4% and just over 4x, respectively. So with that, I will hand over to -- is it Ramon is next or Yes. There we go. Thank you. Thank you, Ramon.

Thank you very much, Stephen. Good afternoon, everyone, and thank you very much for joining us. It's great to have our investor community here again to share in the discussions around the results of our company, and I am privileged to take you through the drivers of those underlying results as usual. Actually, I think I've jumped the line. I think Richardo is actually next to speak a bit about the macroeconomic context. So I'll back soon. Richardo, please go ahead.

I know you're more than capable of doing it. So I'll lay the wicket for you, Ramon, quickly by just looking at the macro context and strategy that underpin the performance in the last quarter and the numbers that Stephen just outlined just now. In some respects, obviously, the event that occurred on October 28 has obviously reset all of the numbers that I will be going through here in terms of the macro aggregates, right? And also contextualizes what Ramon is also going to discuss in terms of main business lines. So in terms of the Central Bank policy, and inflation outlook, the MPC met -- that's the Monetary Policy Committee of the Central Bank, they met in November just after the passage of Hurricane Melissa and decided to maintain the policy rate at 5.75%. On the face of it, it might be a counterintuitive decision. Many individuals would perhaps expect the Central Bank to reduce interest rates given the expected damage from Hurricane Melissa. But they have been acting consistently given past experiences with hurricanes. And we believe that in due course, the Central Bank is likely to shift to an accommodative stance once more capacity comes back into the economy, particularly on the supply side, right? So that is effectively what the BOJ has signaled they will continue to monitor the developments surrounding inflation. And more than likely, what has been communicated thus far is that the numbers will, in fact, exceed the BOJ's target range of 4% to 6%, certainly over the immediate term into financial year 2026, right? So we expect that the monetary policy decisions will evolve given that expectation. So in terms of our business, what this really means is that the FX stability that the BOJ is likely to induce based on their B-FXITT. Their B-FXITT or interventions in FX market thus far is likely to help to continue to support the carry in our business and reduce any kind of value at risk shocks in the treasury and trading business. And this will definitely help to anchor what is happening in the asset management side and also our NII spreads, right? That is the outlook just given the numbers that we are seeing now and how we expect things to evolve. So in terms of economic growth, and demand composition, this is the primary macro variable that we are focused on over the immediate term. We obviously expect a fairly sharp contraction in economic growth for this year, that is 2025 and part of the financial year of 2026 through 2027 based on what the PIOJ has already signaled. Based on -- in the absence of Hurricane Melissa, we would actually expect robust growth going forward because the numbers do indicate that the economy was actually on a fairly robust clip from an economic output perspective. Now it's all about rebuilding going forward. and the Minister of Finance has tabled the third supplementary estimates, at least the preliminary elements of it yesterday. And expectation is that the expenditure to rebuild the economy is likely going to support economic growth going forward. So that is perhaps what we are likely -- are most encouraged thus far in terms of the numbers and what we're likely to anchor on going forward across the main business lines where economic growth is concerned. All right. Apologies. This is not working. There was just one slide. There we go. Apologies. So in terms of -- this is not working properly. All right. There we go. I don't know which lies at Parkinson's. So the final thing that we will touch base on here, and I've pretty much indicated it already just in terms of FX dynamics and BOJ interventions. The BOJ has indicated their willingness to intervene in the FX market to defend the currency. And this is, again, is consistent with typical Central Bank activities when we have such a sharp shock to the economy. The implication here is that we have certainly above average levels of net international reserves by a measure that the IMF proposed which we call ARE, we are substantially above the recommended levels. What this means is that the BOJ has ample capacity effectively to intervene in the market to maintain a fair degree of stability, right? So we do not expect any disruptions or sharp disruptions here going forward on account of the passage of Hurricane Melissa. And in terms of rates and markets, again, our expectation is that the Central Bank based on their policy rate, which effectively sits, you could call it the floor for the price of money in the local markets. We expect them to maintain their policy rate for maybe the next 1 or 2 MPC meetings because of the nature of the supply shock that we have seen in the economy. Once the supply side begins to come back on stream, we then expect the Central Bank to turn more accommodative. -- that is to reduce interest rates to help in building back the economic side of the economy from a growth perspective. So that is how we anticipate that rates are likely to evolve in the near to medium term in the global -- in the local economy. What are the implications, therefore, for us? The implications are that NII is likely to remain stable, as you will see from the numbers or rather as you saw from Stephen's presentation, we have certainly recovered from an NII perspective, and we expect that there's going to be some stability there going forward, notwithstanding the impacts of Hurricane Melissa. And the likelihood is that though there might be some slowdown in the usual investment banking type activities in the market, the flip side to that is that the government's approach to building back from a capital expenditure perspective is likely to support a fairly robust growth in the investment banking space for projects as we rebuild the economy and rates are likely to be at an accommodative level based on what BOJ is forecasted to do. So with that said, I'll turn the -- I'll give the baton to Ramon, who will further contextualize these numbers.

Thanks, Richardo. So as promised I'm back. Hopefully, I have better luck with the technology than Richardo did, right? It's going well so far. So my job today is just to remind you about our strategy and in particular, our strategic pillars and what that means for the business, our business, right? Now these pillars existed before the storm. But of course, the natural implication of such a significant event is that the pillars have had to be looked at in that context, right? So for example, client centricity, which has been at the core of our strategy, which is why it's at the top and spreads across the screen there, meant at the beginning of the year, us getting closer to the customer through our engagement model and through technology. And what that means post the advent of Melissa is really investing time in understanding our clients' needs on one side; and two, investing time in ensuring that our clients can see us as a trusted partner to guide them through the natural implications in financial markets that will ensue in the coming quarters post the hurricane, right? This is where we really seek to earn our keep in the lives of our clients. Business line optimization pre-Melissa meant a focus on sharpening the elements of our business that really can drive margins and ensuring that we rebalance and we spend our time in the areas where we can deliver most value. And pre the storm that was meant to be somewhat of an offensive kind of strategy. Post storm, it has become defensive as we have invested a lot of time as the historical results show in building resilient areas of our revenues, right, fee-based earnings, net interest income, et cetera. And now we are able to kind of expand on that foundation that was built during this financial year into the next financial year when more volatile sources of revenue like trading, et cetera, particularly in the local space will become more uncertain. Operational efficiency and excellence has been centered around improving our processes, enhancing our throughput, seeking to drive more automation, reducing the busy work within our business. And again, that's something that post will redone to our benefit as a business as it will allow us to more effectively serve our clients in the post- Melissa space. The risk and compliance focus has been us really strengthening our governance or continuing down the path of strengthening our governance as a business. Just to remind you all that your business would have had a significant improvement in our visible governance scores over the course of the last 7 years. Specifically, at the point in time when Barita was acquired by Cornerstone, we had a C governance score as measured by the Corporate Governance Index that's put out by the PSOJ. We have since managed to increase that to A and sustain it at that level, right? And we've continued to invest time, resources, effort into improving our governance to ensure that it's efficient, to ensure that it's effective, to ensure that we, as a collective who run this business are held to account to deliver value to you all, our shareholders and of course, by extension our other stakeholders, right? And that focus continues during a period of uncertainty, which is the period that we are now in post this event, a strong risk management posture, strong governance posture is reassuring, right? And we want to ensure that, that's the message that you all see that our customers see. The final point is that our business has sought to complement its organic scale with looking for opportunities to scale inorganically, right? And that continues in the post-Melissa environment. These kind of situations can present opportunities as unfortunate as they are. And we believe the business is well positioned to take advantage of those opportunities if they are to emerge, right? So you have a business, as you see there, that has really fortified its resilience, which is important when you have risk events like this, increased its agility, which allows us now to p on opportunities that may present along the path of trying to pursue sustainable value creation, right? Let me get to the next slide. Let's see if to work with me. Here we are. So in the context of the strategy, I want to talk a little bit about the execution, right? What do these things mean in practical terms, right? And I can tell you, our points of execution, our operational plan has many different levers, but I'm going to focus on a few that are probably most apparent through the numbers and maybe most significant in terms of impact. The first one that I want to spend some time talking about is our business' continuous focus on prudent capital management, right? Now between 2019 and 2021, Barita went down the road of executing a series of equity capital raises, 2 rights issues, 2 additional public offers and the execution of a perpetual preference share. All this saw us growing our capital base by over JMD 34 billion. It really transformed the fee business. And the focus there was to ensure that the ensuing business activities were built on a very strong and stable foundation. And it was a good thing because that period was characterized by the pandemic and in the subsequent period saw a significant tightening of monetary policy, which by themselves have generally adverse effects on some key areas of revenue in financial institutions and also key areas of balance sheet. So we built a business that was not only able to withstand the subsequent effects of the pandemic, that resilience that I mentioned before, but was also able to show positive spots of performance, right? During that period, we actually had a record performance in 2022, positive spots of performance through that agility by virtue of the flexibility that prudent capital management provides, right? The second lever is cost optimization. At this scale, we are looking for opportunities to ensure that we can deliver the same kind of quality with the same level of resources or less or also deliver things in a more effective way, a faster way as an example, right, a better or higher quality level of service delivery. And therefore, we have really sought to go on a credible road of embedding technology in our different processes to respond to the needs of our customers and deliver a higher quality level of engagement, right? The next lever is really the dynamic strategic positioning of our business. We recognize that the macroeconomic environment can change, right? And it has changed a lot over the course of the last several years since I've been in various seats in this business. And therefore, we've sought to set the business up in a way where elements of our operations are what we call market neutral. It means that whether the market is going left, right or center, there are aspects of our business that can be positioned to take advantage of that. Now we're in an environment that, as Richardo mentioned, is going to see a shift in the macroeconomic variables, right? It is probable that we will see the return of inflation, at least in a transitory way. It is probably that we'll see a downturn in growth locally. It's probably that a lot of the economic activity will be centered around rebuilding and recovering post the hurricane. What that means for us is that the strategic options that we have availed ourselves of through that prudent capital management through having several different business lines that we've been optimizing, it lends itself to us having different avenues through which we can pursue participation in this recovery economy. So our investment banking business, for example, Richardo mentioned expectations, opportunities there, we anticipate that we're going to be at the forefront of helping to rebuild Jamaica, right? The final point here is in relation to an element of our alternative investment business. That is our real estate exposure. And we speak about this every quarter because it's an important part. It has been an important part of our business is diversification efforts over the course of the last couple of years. So as traditional revenues were blunted by a tighter monetary policy environment, we saw trading revenues in traditional assets go down for most dealers and banks. We saw net interest income go down. We saw FX profits being muted. Our alternative investment business would have stepped up and provided us with the positive benefits of diversification. An element of that is our real estate exposure and our strategy there is a development strategy. we would have curated a portfolio of development-ready real estate. And in the recent past, we would have made some significant steps towards actually developing that real estate. Specifically, we will have brought in specialized talent into our group with the objective of having that talent steer the development fees and the strategy, having closed out the acquisition fees. And we will have also put in place funding associated with this next leg of development. So we are anticipating now to convert the talent and the money into actual buildings and at a time when the country definitely needs productivity and activity. So what are the anticipated outcomes? Well, the first is that we are focused on continuing to grow our AUM and fee-paying business, right? And that means expansion in our unit trust and managed portfolios. The other expected outcome is continued growth in our deal pipeline on the investment banking side. And I spoke about the event-driven growth that's anticipated from just the overall recovery post storm, but we are also diversifying there as well, looking further field for deal opportunities, particularly within the region. And the final thing is that we're going to manage the balance sheet, right? In the face of more stable rates, net interest income has a positive tilt in a stable rate environment. We had actually been in a rising rate environment, which shifted to a slightly falling rate environment. But with stable rates, our expectations are that liabilities that are more susceptible to repricing they mature more frequently. Hopefully, we can reprice those down a bit such that we can drive growth in our net interest income. So let me see if I can make it to the final slide. Here we go. So let me talk about the business lines. Commented a bit on investment banking. And really there, the key things are as follows: the diversification, looking further and expanding the amount of deals we do in the region, participating in the recovery economy, that's another area of expected growth for us in the next couple of quarters. And finally, we're stepping up our advisory services, right, which is a key component of how we add value to our clients. So it's not just raising money, but applying our own knowledge to giving them some perspective as to how to go about their holistic transaction structure. The treasury trading and brokerage business is anticipated to benefit from the lower funding costs that I mentioned before. We're hoping to see some increase in trading volumes, right, given that we have already enhanced our risk-taking capacity by strengthening liquidity and the strong foundation of the capital base. And we are also going to be focusing on our distribution to see how we can get more structured products out in a time when people are actually looking for creative investment solutions. On the asset management side, we've already seen an 8% growth year-over-year in AUM, and we want to continue to drive growth in the high single-digit, low double-digit kind of territory year-over-year from an organic perspective. And finally, on the alternative investment side, I mentioned already what we're doing in real estate. But with respect to private credit and private equity, we are also entering a harvesting phase rather for some of our investments. That is some of the investments that we would have made a couple of years ago are now at a stage of maturity where we're going to be harvesting and reinvesting on the private credit and private equity side. So with that, I think the key takeaway from my presentation is that we didn't rediscover any element of our strategy coming out of the storm, but it kind of reinforced that the strategy that we had was, I'd say, weatherproof in that it was certainly good for more positive times, and it's now good for a period where we need resilience and where we need to participate in rebuilding the country. The fact is that the effects of the storm has and will continue to pressure test the business community and the sector. But certainly, the sector at large and our business is very strong, very resilient in being able to withstand the challenges ahead. With that, I'm going to hand over to Dane, who is going to speak a little bit about our group operations and what that means for Barita. So Dane?

All right. Thank you, senator. So as Ramon mentioned, I'm going to talk a little bit about our group strategy, general alignment with Barita and what that means for our operations. So first of all, just an update on the reorganization. As you know, we have done the reorganization of the group earlier this year, and we're currently in the licensing phase of the regulatory process. And after that point, Barita will be a part of a licensed FHC structure with BOJ having regulatory oversight of the financial group, at least under the current framework. Now meanwhile, we're complementing this with the integration of the organizational structures and ways of working across the group, again, as we continue to align with the intended future FHC structure. So key departments within the group are organizing within a sort of shared service and integrated operating model that's really designed to enhance efficiency, improve productivity and strengthen overall customer experience and engagement. And of course, we spoke about the ideal strategic synergies that we're looking for from the reorganization, which are operational efficiency, customer centricity and governance and risk management, right? So overall, we're really moving the group towards the strengthened platform that's going to optimize the management of the group's resources and give customers an expanded and improved client experience. So the strategic pillars for Barita that Ramon would have mentioned, again, as I've mentioned before, we remain aligned to the pillars of the group. The intended ideas of the group's reorganization surrounding customer centricity and efficiency permit from the overarching group strategy and for that matter, in terms of governance and risk management as well. Now throughout the group and including Barita, would have implemented and will continue to implement several necessary initiatives along different strategic pillars. So in terms of innovation, we're looking to be innovative by design and making continuous improvement a standard part of the way we work. Now we've had several programs internally where our staff have had the opportunity to showcase and even put into implementation their initiatives and innovation, right? And we're going to continue to expand that push in the coming year. Of course, we look to maintain and strengthen our governance and risk framework, really deepening that risk culture across the organization and importantly, reinforcing ownership within the 3 lines of defense, particularly in the first line. Now in addition to ensuring our resilience, we're going to ensure that we are well positioned to thrive within the evolving regulatory environment. From a people perspective, of course, we continue to make the group a great place to work and again, build the organizational consistency around key elements of what we want our group to be that are nonnegotiable, right? And that's going to include more deliberately infusing innovation and customer centricity into the overall group's culture. And lastly, the general optimization of our financial resources to ensure that we evolve towards our ideal business mix, the business mix that Ramon would have spoken about, have an ideal asset mix and have an ideal funding structure so that we optimize the way that our business is organized. So we have partly done that through the successful bond raise initiative. It's partly going to be executed through our inorganic expansion strategy and also general disciplined management of our resources. So I have outlined across a couple of different investor briefings, the key reorganization outcomes. So we speak here about customer centricity and efficiency. And so we've committed to customer centricity as a group, really sort of looking to organize our group, as I mentioned, around the needs of our clients. So our goal is to provide a seamless access to all the capabilities within the group and ensuring that every client can benefit from the full range of our services. We've looked to tailor specific customer experience models and standards for each of our customer segments, really guided by the core principles of what we expect to be the Barita experience, right? Those are expertise, accessibility, trust and, of course, responsible evolution. And we're also focused on improving operational efficiency by streamlining the way our units work, streamlining our processes and optimizing the way that we deliver services to our clients. So specifically, we're looking to unify best practices and standards across the group to achieve operational excellence. So the groups have evolved in different -- from different starting points and develop best practice across other similar processes. We're looking to unify those best practices across the group. Specifically, as Ramon mentioned, we're leveraging technology enabled efficiency and automation, which really focuses on really institutional led our institutional mandated improvements in selected processes, of course, complemented by localized enhancements driven by our productivity tools and of course, the innovation enablement that we spoke about earlier. Now as we look to grow organically and inorganically, our capital base is going to continue to be our springboard. This is what enables the acquisition element of our Barita strategy is going to be the foundation for augmenting our earnings in the future. So in addition to the existing business and its ability to generate earnings, you really, as I mentioned before, really invested in Barita's capacity for growth, much of which we're looking to execute. So -- and the capital base and the strength of the capital base continues to be a feature across our group. So we know Barita's capital adequacy is among the best in the industry, accounting for under 1/4 of the overall capital base. And similarly throughout the group, our sister company, CTMB has a high capital adequacy ratio among DTI. So again, these are really meant to support the growth ambitions and the evolution ambitions throughout our group. Now as we look to utilize that risk capacity to enable growth, we're going to be equally focused on optimizing that risk capacity. In other words, we want to ensure that the exposures that we have that utilize the risk capacity that's embedded, particularly in our capital and in our liquidity continue to have the expectation of delivering the returns that justify them, whether from a hard financial basis or from an institutional basis as our strategy evolves. And of course, notwithstanding the resilience that's embedded in our capital base, that provides a strong buffer to any shocks through our overall thrust for continuous improvement, we continue to ensure that our risk exposures are only either a function of broad systemic market conditions or are otherwise deliberate. So it's not -- we will try to really minimize risk but define really where we have appetite for risks and ensure that our risk-taking activities in line with that appetite. So the strategic ideas that we have are built on that deliberate foundation of risk governance and controls, and we're going to continue to focus on risk ownership at first line of defense and ensure that, that risk culture is permeated through the risk owners across the organization, of course, while achieving the ideas of our group structure and optimizing the efficiency of our governance and maintaining positive client experiences as we manage our risks and comply with regulations. So specifically here, we're looking to develop centers of excellence and embedding certain processes for key elements of our risk management framework, especially those that are customer-facing to deliver operational consistency and to enhance the associated customer experience. So that's largely the focus of our governance. So again, shareholders and various stakeholders, as you think about Barita and you think about the context of the Barita Financial Group and the core of our competencies, our identity will continue to be along these 3 lines: innovation, risk management and risk capacity and customer centricity. So again, we're organizing ourselves structurally to deliver on continuous improvement and proactively meet the needs of our clients while we optimize our efficiency. We're maintaining our financial resilience through above-average levels of capital and operational resilience through our governance and control environment while ensuring that we use our risk capacity as our springboard for growth. And finally, organizing our operations around our customers and taking deliberate steps to institutionalize the elements that allow us to listen intently and respond to our customers, leverage our expertise and institutional capacity to exceed their expectations and ensure memorable interactions throughout our group. All right. So thanks again, everyone. That is our presentation, and we're looking forward to answer your questions.

Thank you, Dane, and thank you very much to our executive team for taking us through the financials and giving us that great context that relates to our performance and of course, sharing some insights into the new financial year. So you have heard a lot from us, and it is now our time to hear from you. I have seen some questions coming in throughout the presentation, but just a reminder that it's not too late. So if you do have any questions, please go ahead now and drop them specifically in the Q&A section. That's what we have eyesight to, and we look forward to answering your questions. All right. So our first question is asking which sectors do we expect to grow the most over the next decade? Yes. I'm going to ask Richardo to take that one.

All right. So the next decade, obviously, is quite some distance away. We can probably speak about what our expectations are in the intermediate term. Based on what the Minister of Finance indicated yesterday in the third supplementary estimate and what logically will follow post-Melissa environment, we expect that the real economy is expected to grow certainly sharply relative to the historical averages, right? Because what that practically means is that the government for many years have not always exhausted its budget from a capital expenditure perspective. So now is an opportunity for them to do so. So we're going to have to rebuild our roads, rebuild our critical infrastructure, such as hospitals, schools, et cetera. That will then have some knock-on implications in terms of demand for aggregates. It will have implications for basic consumer staples, such as rice floor, et cetera. That has been our historical experience in terms of how the economy evolved post hurricanes in the past. So over the next, say, 2 to 3 years, that's -- those are the sectors we're likely to see growing. Manufacturing and distribution, just to use how they are organized on the JSE. So manufacturing and distribution, that is what we saw coming out. Consumer staples also expected to grow. In terms of finance, we expect that to grow as well based on how we have seen the economy evolve, right, because the recovery mostly financed, right? And then we're going to have new industries coming on board such as telecoms or broadband broadly defined to ensure that we are resilient. We saw some more vulnerabilities coming up in the passage of Hurricane Melissa, and that has been signaled as well by the government that is something that we're going to actually be quite intentional about in terms of building our capacity in those new industries. So that in a nutshell is how we expect things to evolve over the near term, intermediate and long-term tenure as you have find it.

Thank you, Richardo. Our next question is a general question. Does Barita offer automatic monthly investing? And can investors start with small contributions? CEO, are you going to take that one?

Yes, I'll take that one. Richardo did the heavy lifting for me. So [indiscernible] almost look at here. Yes. So the short answer is yes. There are a number of different ways you can invest to those. You can do stand in orders to the extent that you have an employer who can facilitate something like that. yes, there now. You can also do or rather salary deductions. That's what I meant, yes. You can also do standing orders between your bank and our account here and your adviser can help you to set that up. And yes, we do "small amounts". In essence, we can set up a structured program for you where you can do what we call serial investing. You can set it and forget it and remember it on a remedy when you're ready to make a big purchase. And we encourage it actually. I mean investing is a process just like many other things that have a positive outcome at the end. It requires consistency if you are going to achieve a good outcome more often than not. So we do encourage investing in that way. So please visit our website for any initial information that you may require, www.barita.com. Carlos come in. We have locations here in Kingston, in Mandeville and in Montego Bay. So we're ready to start the investing conversation with you.

Just to really add to that. I mean that is a type of question that as Ramon would know, kind of really warms my heart, right? As Ramon mentioned, I mean investing does require consistency and the best way to achieve consistency is to make it systematic. So for sure, we'll be keen to establish those systematic processes for you to aid in that respect.

Thanks for that, Dane and Ramon. All right. We have another question here in regards to the positioning for Jamaica post Melissa's capital cycle. The question is, given that there's an expected multiyear reconstruction period after the hurricane, and there's going to be a strong surge in both public sector and private sector financing needs, how is Barita positioning itself to intermediate this capital cycle? Dane, I'm going to ask if you can take that one.

I'm sure Ramon may want to support. But following the passage of the hurricane, the primary focus for our with respect to our customers is really ensuring their well-being, really both from a personal perspective and from the perspective of their livelihood and in other cases, their businesses. Now to the extent that in the course of those conversations, opportunities do come up, then, of course, we will position ourselves for those. As Richardo mentioned, we're keenly aware of the importance in this recovery of really restarting productivity, right? And I think as we talk with various clients who are positioned in various sectors, we're keenly aware, keenly oriented towards supporting those customers that help to sort of build that recovery and build that return to productivity. So as Ramon mentioned, based on our strategy, the expansion and deepening of our investment banking capabilities was already a part of the strategy and definitely will help in that respect. And of course, to the extent that there is any opportunity for participation, then even from -- whether from a proprietary perspective or from the perspective of our funds, there will be participation and support there. So generally speaking, across our business lines, we are well positioned for it. But as I mentioned, definitely in this immediate term, our focus has largely been around ensuring the well-being of our clients.

Thanks, Dane. No, I mean, I won't add too much. Maybe I'll go a little bit more macro. The truth is that we've seen a lot of numbers swirling around coming out of the storm, the damage that has been done, right? I mean here USD 9 billion, USD 10 billion, which is a significant sum over 40% of usual GDP. But what hasn't yet been measured is the opportunity cost and the losses -- the go-forward losses associated with the loss of that infrastructure, businesses that have been shut down, people who are not able to function normally. So it will take a lot more than that to get the economy back to parity and also then to get us now to growth. The government would have announced early measures with respect to seeking to kickstart the economy, right? The third supplementary was released by the Minister of Finance yesterday in the House of Representatives and there are amounts specifically referenced to focus on post Hurricane Minister recovery. I think about $29 billion was announced to be allocated across a number of ministries. Tourism, I recall, will be allocated just over $3 billion. The Ministry of Economic Growth and infrastructure will, I think, take a large chunk of that. So I think over $7 billion will be allocated there. But in totality, I think the sum is about $140 million. That by itself is not enough, right? There is a financing package that would have been announced involving a number of international financial institutions, the World Bank, the IDB, et cetera, for $6.7 billion. Even with that, there is still significant room for private capital to get involved, right? And therefore, from our business' perspective, we certainly, as I mentioned in my presentation, want to be at the forefront of the conversation from a capital markets perspective. And what does that mean tangibly? The rebuilding efforts will not, in many instances, be centered around replacing what was there like-for-like, but it will be an opportunity for us to bring new, more resilient, more efficient infrastructure to bear in Jamaica. And that needs funding. And from our perspective, we would certainly we'll be playing our role in mobilizing private capital to be a part of that funding stack. There will be, I think, a keen interest in international investors to mobilize capital here in Jamaica, and we want to be a conduit for that platform through which they can safely and efficiently deploy their capital to participate in Jamaica's rebuilding efforts. We have our own ideas, our own thematic investing over the course of the next cycle and even allowing for our clients of various kinds to access that through vehicles. So that is feeding into our product development as well as a firm and as a group. So we are positioning well. We've built up the resilience of and we are now pivoting to see how we can get involved and be a part of the opportunity coming out of the strategy.

Thanks, Ramon. In the backdrop of what you would have shared, I think this is a great question. In the wake of Hurricane Melissa, what will customer centricity look like in practical terms for clients and investors who are focused on wealth preservation and long-term growth?

No. Good question. I like that question actually. So I mean, what Melissa revealed to us or reinforced to us, frankly, is the fragility of aspects of our infrastructure and architecture throughout Jamaica, right? Many aspects or many areas rather of the island were and some still are almost cut off in terms of access, both physical access and access via various channels, phone, Internet, et cetera, right? And what that even meant for us as a business is that our operations in the West had a delayed reopening relative to our operations in Central and Eastern Jamaica here in Kingston. So it means for us that as we think about how we serve our customers, we are certainly as a business seeking to build in additional resilience our channels to ensure that we are less susceptible to disruptions. I mean, I've heard it said over and over, it's very difficult to plan for the kind of weather event that we would have experienced. But there are other less severe events, weather and otherwise that we do need to prepare for. So that's an eye-opening thing. So the first thing is ensuring that we give our customers greater options and we build in more resilience and redundancies with respect to the access to service. Now to speak about the practical effects and the intention, I mentioned earlier that we now have to become closer to our customers. both with respect to providing investment advice in an uncertain post-storm environment and also providing other advice for our customers who are seeking capital and financing options to rebuild or to expand or to take advantage of opportunities in a post-hurricane economy. So we're going to be putting on our thinking caps or I suppose, more intense versions of them in this environment, right? The other thing that we have been working on that has become even more important is how we deal with our customers efficiently at scale, right? So utilizing the technology in the present day to provide pertinent information on mass to our clients, right? So embracing technology and its possibilities in that regard. That's another thing that we are working through as well. So it's really getting more intimate during this phase, being that trusted adviser to both people who want to invest and people who need investments and really leaning into the tech to make sure that we are accessible and we can provide advice at scale with speed during this time.

Thanks very much, Ramon. All right. So our next question is asking if the hurricane has affected Barita's real estate properties and is construction still set for 2026 to boost the real estate market portfolio?

I'll take that one. So the properties in the portfolio were largely development -- are largely development properties. So happy to see that the effects thankfully were minimal in relation to those properties. So we haven't suffered any losses to speak of in relation to them. With respect to the development time line, yes, still very much intact. And in fact, as I mentioned earlier, there are elements of our development pipeline that may actually be positively impacted by the state of play. There is a lot of unfilled demand know that exists by virtue of the adverse effects of the storm, the disruption that has created. So we are certainly accelerating our activity in some areas of the island. And there is at least one aspect of our development pipeline that has been pulled forward in terms of time line. So still on track for 2026, sorry, just to say.

All right. I have a couple of questions on this topic, asking about the reorganization. So maybe I'll ask Dane if you can just give a general update as to where we are with that and any time lines, if possible.

Okay. Thanks for the question. So again, we're in the licensing phase of the reorganization process. As I mentioned, we have gone through the actual corporate reorganization earlier this year. So in terms of time lines, it's difficult to say. We are in the process -- fully engaged in the process with the regulator. I'd like to think that we are far advanced in that process, but I wouldn't be able to offer a specific time line at this point.

Thanks, Dane. All right. The questions are coming in. So thank you so much for the engagement. Our next question is asking in regards to the medium to long term, are there any strategic consideration of expanding beyond the Caribbean region? And given the current concentration of economic exposure to adverse climatic conditions.

That's an excellent question as well, right? The truth is that when you have these kind of risk events, you start to think about various means of mitigating the effects of them, right? So when you have the unfortunate happening of a hurricane ravaging the Island, you said to yourself, how can I build in redundancies and expand my business all over such that I'm not concentrated in that way. At present, from a Barita perspective, I'm not talking about the group, our intentions are to focus our diversification largely on doing more business within our region. We are very sensitive to where we have our core competencies, right? So our risk of diversification is diversifying out into areas that you have no business being in that you have no strong command or competitive advantages in relation to. We are largely a Jamaican firm. We have, over the course of the last 7 years, however, diversified our exposures materially relative to before, away from singular reliance on Jamaica. Our group at that level has built in a broader geographical diversification. But for now, Barita is intent on expanding here in Jamaica, doing more business in the region and focusing on our core competencies and where we have a competitive advantage. With respect to the effects of climate risk and resilience, we are aligned with the overall national effort in building in redundancies there and building in safeguards there. We will be adopting similar methods in our business, but we're not abandon in Jamaica in the way of the storm at all.

Thanks, Ramon. All right. There is a comment followed by a question. So this is noting that our report highlights investment in human capital and training initiatives. They're asking how is Barita retaining and competitively compensating its talent in an increasingly competitive financial sector. Also given the demands for analytics, risk management and digital transformation capabilities.

You're going to go, Dane, no problem.

So our approach to talent management, generally speaking, has largely been along the lines of optimizing our talent pipeline. And we've done this through several different initiatives. I mean we have developed relationships with the universities in particular areas where particular competencies that we think are going to be the future of the way that we work. Within those universities, we've been developing and testing a lot of the skills that we believe are important for future-proofing our business. We have -- many of you will have heard of our analyst program, we've taken top talent, top young talent throughout the industry and really expose them to different areas of our business, particularly along the areas that were mentioned, risk management, analytics, digital transformation. And to complement that, we've been retooling our internal staff in terms of the various training programs that really sort of look to, again, build those competencies and test them internally and give them the opportunity to put a lot of those innovations into implementation. So across various initiatives, what we're really working on, what we're really focused on is optimizing the skills of our existing staff and building a strong talent pipeline for the future ways of working.

Thank you, Dane. Next question. Does Barita offer free financial planning or portfolio guidance for young people or students? I think our CEO will take that one as well.

I will. So the truth is that as a business, obviously, that is our ethos, that's what we're about. And it translates as well to the work that we do in our foundation. And our foundation has been very active too in the wake of the passage of the storm and active not only with respect to badly needed an immediate aid, but thinking through how in the medium term, we can be a part of the structural recovery. So you just said that the foundation operates along a few tenets, right? The first is education. The second is health and well-being. The third is entrepreneurship, right? And holistically, financial literacy is a critical component of the work that we do on that side, right? So what you described is encompassed in our financial literacy thread. We have done a lot of work over the years in twinning our education theme with financial literacy, starting with as early as high school, right, and going up to university. As Dane said, we have as a business aligned ourselves very well with universities, with social clubs at the universities. And a key part of what we do there is sharing from our core business as well, right? So we do, in many ways, provide that kind of advice to young people. But the structured nature of the question has given me some ideas. So there may be an opportunity for us to enhance our impact in that area.

Thanks, Ramon. I have another question for you. Ramon does go by many titles here at Barita, and he's recently added a new one. So this person is greeting you as Senator. And he would like to know why are there no Barita billboards in the Parish of Westmoreland?

This one sounds familiar. I think I got this question some years ago when I was on another program, right? So we were actually as a team recently in Westmoreland as part the relief efforts I have mentioned coming out of the foundation activity. I think we were in White House, right? I mean I can't answer the question. I don't have an excuse. Certainly, the spotlight is on Westmoreland, and the reason is unfortunate. But I think what it presents is an opportunity for us as a collective, as a country to come together and focus on helping to rebuild that Parish that has such a rich history, sorry, in the context of Jamaica. So as part of that rebuilding, I can commit to contemplating as we rebuild Westmoreland and help to restore its beauty, putting some Barita presence there, right? A billboard is a good way to start as well. But I mean, our hearts are with the people of Westmoreland as they start to recover, and we stand with you as individuals and as a business. So we certainly will be there more often and maybe we'll leave a billboard, right?

Thank you, Ramon, nicely put. All right. I think we have now concluded all of the questions that I've seen submitted. So ladies and gentlemen, thank you very much. We really enjoyed the opportunity to answer those questions directly. And since we have now answered all of them, that officially brings us to the end of our 2024 to 2025 financial year's earnings call. It really was our pleasure spending this afternoon with you and sharing all of the information related to our financial year and the start of our new year. If you did join late or you would like to rewatch this presentation, you can look out for the upload that will be shared throughout our various social channels, including our website at barita.com/beat, YouTube and Instagram. So please look out for that. And again, we thank you so much for your time and your engagement today. We ask that you please continue to track our progress as we head into our new financial year. And on behalf of the entire Barita team, those of us that you're seeing here in front of the camera and those of us that are working behind the scenes, we would like to wish you a wonderful holiday season. Again, our thoughts and prayers are with the entire island, and we are here doing our part continuously in the rebuilding of Jamaica. So we would like to keep those sentiments going into the season with unity, hope and faith. So thank you very much. We look forward to seeing you again very soon. Have a good afternoon.