From:
Sent: Friday, January 30, 2009 4:07 PM
To: GLOC all Admin Staff & Agents with Execs
Subject: Message from the Group CEO to All Staff
Fellow Guardians,
You would have heard today that the Central Bank of Trinidad & Tobago has announced a rescue programme for the CL Financial Group.
We view this move as very positive, since failure of the CL Financial Group could have led to systemic risk across the financial system of not only Trinidad and Tobago, but the wider Caribbean region as well. It is with the best interests of the country in mind, and all her financial institutions, that we stand in full support of the Central Bank’s initiatives to bring the CL Group back to a healthy standing.
How does CBTT intervention and the ongoing global financial crisis affect the country?
There is no reason to predict a severe economic downturn in Trinidad & Tobago. A moderation of spending by Government and consumers will be a very good thing. The Governor of the Central Bank and the Minister of Finance have given the unequivocal assurance of the strength of the financial institutions and the Government. We will weather this storm if we abide by the following rules: save more in prudent and transparent investments; defer unnecessary spending; and take to heart the learning experiences of this time.
How does this crisis affect GHL’s business?
1. Your board and management have been consistently prudent in the conduct of Guardian’s business. Our overall investment portfolio is very conservatively managed, with minimal exposure to international equities. We did not invest in exotic debt securitization which caused great financial harm to many and the failure of others. We concentrated our hard currency investments, be they US dollar, Euro or pound sterling denominated, in Government securities.
2. The Group has a very strong liquidity position. Our businesses have continued to perform very well during these turbulent times, and they continue to generate excellent cash flow for GHL. In addition, we have executed on two very significant transactions, namely the sale of Grupo Mundial and our shareholdings in RBTT/RBC. These two transactions alone generated over $2.1 billion in cash for Guardian.
3. The Group has long applied the principle of dealing only with top rated reinsurers. To the extent possible, we have secured the backing of absolutely blue chip global reinsurers, including Lloyd’s, and are of the view that risk emanating from this source is minimal.
4 Our financials show that we are extremely strong. Our solvency ratios are well above regulatory minimums, and independent financial rating agencies like A.M. Best rate us A Excellent. We have just embarked on the first ever Share Repurchase Programme in the Trinidad & Tobago market place which is evidence of our confidence in our company and in the future.
In other words the GHL Group is as solid as a rock and it is liquid!
Has GHL ever dealt with kind of financial crisis before?
We have indeed been through market crises before – GHL has been around since 1847 and recessions have been part of the financial cycle, in the 1930s and in the 1980s. Our Jamaican subsidiaries, GLL and GAMJa, operate in a very difficult financial climate. It is GHL which went in some 10 years ago to take over the portfolios of three failed insurance companies and merged them into a success story of which Jamaica is justifiably proud.
What does all this mean for Guardian’s people?
In periods such as this, of fear and uncertainty in the investment world, Guardian’s 162 year history of prudence and excellence represents the gold seal of Quality in wealth and asset protection and management.
We can best serve our fellow citizens with advice amidst over-information and misinformation. We can show Trinidad & Tobago and the region, how a quality financial institutions serves its people in times of stress – with Integrity, Quality, Growth and Service.
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