Wayne Wray, president of First Global Bank. - File

First Global Bank has signed a US$20 million agreement with the International Finance Corporation (IFC), a member of the World Bank group, to expand its capital base and to provide funding for on-lending to Jamaican businesses.

The agreement was signed on Friday at the bank's office on St Lucia Avenue in New Kingston.

The agreement will see the IFC investing US$10 million in non-redeemable, non-cumulative pre-ference shares, and US$10 million in the form of a loan for on-lending to small businesses.

20% minority shareholder

The US$10 million will make the IFC about a 20 per cent minority shareholder in First Global Bank, Adel Meer, investment officer, financial markets for the IFC, told Sunday Business.

"We see this agreement as both an endorsement of our stewardship of First Global Bank, as well as a sign of tremendous confidence in the future of First Global Banks and its customers," said Courtney Campbell, chief executive officer of First Global Holdings and of GK Investments, the GraceKennedy division that handles the conglo-merate's financial businesses.

"This vote of confidence is even more remarkable when one considers that the international credit markets have been literally frozen since September of 2008," Campbell said.

Meanwhile, Wayne Wray, president of the First Global Bank, said the agreement would not only strengthen the asset base of the company, but would also allow the bank to learn from the international experience of the world's largest multilateral organisation.

Wray said customers and Jamaican businesses can look forward to banking solutions that address their immediate needs, such as revolving working capital financing for purchases of raw materials and semi-furnished goods, medium-term projected loans for capital expansion, and international trade financing to meet foreign-currency obligations and suppliers.

Significant event

Kirk Ifill, the IFC's representative for the English Caribbean, said it was a significant event, which will strengthen the balance sheet of the bank. He also noted following on this agreement, the IFC would offer advisory services and technical assistance to strengthen the capabilities in the SME sector.

Wray said the bank, which is part of the GraceKennedy group and No. 5 of seven in the commercial-banking sector, would offer the loans to the business sector at attractive interest rates.

"Let's say the rates are available both in Jamaican dollars and US dollars and they are very competitive, but we will not be outdone on a good project, we will give the best rates and terms that are suited to that loan application," said Wray.

First Global Bank has an asset base of over $30 billion as of December 31, 2008. It grew its loan portfolio by over 60 per cent last year.

As of January 2009, the IFC's committed portfolio in the Caribbean region totalled US$379 million.

Since 2000, the IFC has provided and mobilised more than US$1.3 billion in financing for the Caribbean in such sectors as financial markets, infrastructure, information and communications technologies,manufacturing and services, health, and education.

dionne.rose@gleanerjm.com