First published in the Business Observer on Wednesday, February 22, 2006 in the run-up to the 2005 Jamaica Observer Business Leader Awards, which was won by Ryland Campbell. Last Friday night Campbell died at age 81.

Within financial circles Ryland Campbell stands out as an entrepreneur with a particularly steady pair of hands that safely navigated Capital and Credit Merchant Bank through Jamaica’s most perilous financial sector crisis.

The result of that delicate balance between risk-taking and old school caution has been the emergence of an institution that, after only 12 years in existence, has been churning out financial numbers that are the envy of the industry.

For 2005, the Capital and Credit group, of which Campbell is executive chairman and principal shareholder, posted net profit of $1.16 billion, a 34 per cent improvement over the $864-million earned in 2004.

That profit translated into return on average equity of 30.77 per cent, more than twice that earned by those investors holding government instruments that year.

Yet, another key index of the meteoric rise of this company, and the sustainability of its performance, is the shareholder equity which, from a modest $20 million in January 1994 when the bank began, reached $4.67 billion at the end of December 2005.

The stock market currently values Capital and Credit at $13.18 billion, or roughly three times book. Year-end total assets amounted to $52.88 billion.

These numbers, as auspicious as they are, do not adequately reflect the mystical, qualitative flavour to the leadership that this 63-year-old entrepreneur has brought to the banking group.

But, perhaps paradoxically, Campbell and the team of investors who set out to buy into the banking sector in 1993 had the good fortune of having available to them only a merchant bank that was mired in bankruptcy, and whose name had become a pariah in banking.

That institution, Tower Merchant Bank, provided the new principals Andrew Cocking, Jamaica Broilers Group, Davon Corporation, and Weststar (a financial company led by Campbell), with a virtual roadmap of how not to conduct business.

“We decided from day one that we were not going to get into the business of real estate,” said Campbell, with the characteristic firmness for which he is noted.

That was lesson number one.

“We decided that at least in the early stages we would go light on loans, because with those interest rates, customers would not be able to pay us back. We decided to stick to government paper.”

The subtler, yet more far-reaching, policy was that of creating a collegiate decision-making structure — for fundamental matters — a policy which, according to Campbell, helped the nascent institution avoid the power centralisation that contributed to the mistakes that became a feature of the sector later in the decade.

“The idea was that you needed 80 per cent of the votes from among the principal shareholders for certain major decisions,” he said. “You therefore had to convince several people to go along with you.”

The first challenge that faced the shareholders — Campbell as chairman, and Cocking as CEO — was to convince the distraught depositors in Tower to keep their $17 million in the bank, while the new owners tried to rebuild the institution.

“On January 24, 1994, when we opened for business, there was only minuscule withdrawals,” said Campbell with a sense of relief. “It gave us confidence that depositors felt it was better off working with us.”

Capital & Credit was in business.

The merchant bank had five employees, including its current CEO Curtis Martin, and Cocking crammed into an office characterised by Campbell as “a little cubicle on Holborn Road”. But, by his own proud acknowledgement, the modesty of the “little cubicle on Holborn Road” was nothing compared to the humble beginnings of this country boy turned banker.

In that deep rural farming village of Carmel in Westmorland near Darliston, Ryland, the eldest of eight children of Reginald and Perlie Campbell, learned the rudiments of good character that, he said, served him in his later years.

“There was no running water, no electricity,” he remembered.

Water was stored in tanks that farmers would set up on their land with financing from the Ministry of Agriculture.

In the community, most families earned their living from sugar-cane, cash crops and dairy farming.

Including the Campbells.

The patriarch, Reginald, who died in 2002 at age 91, was, as Ryland put it, “a jack of all trades, one of those versatile persons”. Among his stock in trade: a farmer, stock butcher, carpenter, and mason.

Perlie, the “homemaker” is now 82 and living in Santa Cruz where she and her now deceased husband bought a home and relocated in 1972.

“She managed a little grocery and meat shop,” is how Campbell fondly remembered his mother of the early days.

Growing up in a village with limited options, Carmel Moravian Church became what Campbell called “the centre of my world in boyhood”.

“I grew up in the church,” he declared. “I was a scout, a boy singer in the church choir. I became assistant scoutmaster.”

Carmel Primary School reinforced the strong religious values inculcated at home and church.

“It had a very strong background in religious education and principles of good conduct and behaviour,” he claimed. “Most of the students went to the church.”

Country life also meant that, as the eldest sibling, Campbell had to help his father in butchering, milking cows, making breakfast for the family, helping in the shop, and general housework.

“I have run the gamut of doing those little chores as first child,” he brimmed with pride. “This is when I learned my home skills
— to clean the floor using the coconut brush and beeswax, and Kwaku bush as oil to give it a sheen.”

With an obvious sense of gratitude, Campbell spoke about the foresight of his parents in insisting that all the children attend school every day, and the fact that “I can’t recall ever going to bed hungry because we had fruits, food, and obviously meat.”

Even against the backdrop of such an agrarian culture, the little village was not devoid of intellectual stimulation. For example, Campbell remembered the family shop serving as the centre for public discourse
— with World War II heroes regaling the entire community with their heroism
— and returning British residents bragging about their exploits.

“There is a certain hardiness that you get in your development,” he pointed out. “The values that my parents brought to the table were important. I can say without reservation that they taught and practised honesty and integrity in all facets of their lives.”

After Campbell passed his local exams, he spent a year as a pre-trained teacher before heading off to Mico Teachers’ College in 1962, to pursue what, for him, was his inescapable career path.

“When you grow up in rural Jamaica there are not many choices that you are exposed to,” he reflected. “I really wanted to become a teacher because of the esteem with which the teachers were held, and the leadership of people like Ralph Anglin who served as headmaster and lay preacher.”

Like most of the other students, Campbell’s college education was financed by the Government. It was at Mico that the early leadership skills he displayed while growing up in Carmel began to really take shape.

Here he got involved in almost every aspect of student life: volleyball, football, captain for Grant House, scoutmaster, and so on.

His time at Mico also coincided with the early period of naive post-independence optimism when Jamaicans, and especially tertiary students, began to think that any and everything was now possible.

“We had a special feel about the turning point in our political life,” he recalled. “One got a feeling of excitement during that period. We felt we had truly embarked upon a period of independence.”

But there was also the rude awakening that nominal political independence had far from translated into real social and economic empowerment when a young Evon Blake dared to step into the swimming pool at Myrtle Bank Hotel.

The manager was reported to have flushed the water from the pool.

This was a seminal moment for Campbell and some of his colleagues at Mico.

Suddenly, the road from independence had got more complicated.

“Myrtle Bank was not a place where black people could go to and socialise,” he offered.

After graduation, Campbell headed back to Carmel, taking a teaching job at Chantilly Primary School, three miles from his home. He continued his involvement in social life.

By 1966, with a salary of £525 per annum, the thrifty, ambitious teacher was able to save enough to pay down half the purchase price on his first car — a three-year-old Austin Cambridge he bought for £400 from a tailor in Siloah.

He borrowed the balance from Scotiabank in Black River.

Campbell still remembered the licence plate number: S2627.

In 1967 this budding teacher made an aborted attempt at switching career, to an insurance salesman for Colonial Life Insurance. The stentorian objection of his mother forced him to reconsider the offer from the firm.

In preparation for the flashier career as a salesman he had sold the Austin for £450, and bought a one-year-old Corsair GT
— “with soft clutch, red leatherette interior, and which purred when it started”
— from Caledonia Motors in Cross Roads.

“I remember using the seat belt as style rather than safety,” he let on. “I saw returning residents using it and it looked stylish. I thought it was a good idea to look successful with a flashy car.”

But with his plan to switch career scuttled by his mother, Campbell found himself back in the classroom, this time at St Elizabeth Technical High School (STETHS).

Here is how he recalled that event.

“I arrived on the premises without notice and greeted Principal Jasper Wray, who was my house master at Mico… He said, ‘if you want the job, the job is yours. I will rely on you to deliver’.”

He started teaching first and second form students, but quickly moved to teaching the exam batch when their geography teacher left.

“I am proud to say students delivered the best results,” he said. “I had built the communication relation with students which made them enjoy learning.”

There was one big advantage in being at STETHS: one of his two younger brothers, Audley, was attending the school “and I was closer to him to oversee what he was doing”.

Campbell also sold his car “and started walking again”.

This budding community-spirited teacher continued his involvement in a wide range of activities, including the school savings programme of which he became chairman for the parish, the citizens’ association, and the National Savings Committee of which he was parish vice-chairman.

“The school savings programme was an important part of fostering savings,” he explained. “The students were learning to manage savings.”

He said the position “taught me how to deal with powerful people even when you are leading them”.

In 1971 Campbell left the classroom to become a child care officer for one year, and the following year, an executive officer for the St Elizabeth office of the Bureau of Regional Affairs. This travelling job allowed him the indulgence of a brand new Fiat 124 special for which he paid $2,400.

He grabbed the opportunity to get into mainstream banking when, in 1974, he took a job at the newly formed Workers Bank, selling payroll savings
— the same year he got married to Arlene.

At Workers, Campbell began to race up the corporate ladder: from business development representative, to officer, to being in charge of the programnme by 1978.

In 1979 Workers opened a branch at Black River, and the general manager, Elsworth Williams, offered Campbell the job as manager.

“The GM said that I was unanimously endorsed by the managers to take over the Black River branch,” he told the Business Observer. “I thanked them for the endorsement but declined the promotion, because I wanted to complete the course I had started at university.”

More promotion was in the offing: credit officer at the Half-Way-Tree branch, then manager at the newly opened Maxfield Plaza branch, followed by a posting at Tower Street, the main branch, as assistant manager under Winston Dwyer.

In 1981 Campbell was promoted to assistant general manager of loan administration at Workers, but by then he had got the first sting of the entrepreneurial bug.

“I began to think that it was time for me to pursue a financial path which my father promoted — that of independence,” he noted. “I was not quite sure what it would be but the voice was urging me.”

That bug took Campbell to the rent-a-car business — first with two Toyota Corollas he acquired from United Motors in 1982. He had wanted four.

At the same time, he began to acquire real estate, starting with the apartment at Ravers where he lived, and for which he paid $60,000 “fully furnished”.

In 1983 he was invited by Elon Beckford to join Citizens Bank where he served as general manager for the trust and merchant bank. Later, he became assistant general manager for credit administration at the bank, while remaining managing director of the trust company. By then Campbell had set up a car rental company with independent employees, with the knowledge of his bosses who he said told him “it’s OK, as long as you do not use the bank’s time”.

Other investment opportunities began to present themselves. “By 1983 I began to venture into the stock market, something I had never done before. I started investing for the merchant bank and my own account.” Campbell recalled Mark Ricketts and John Jackson as being at the forefront of encouraging investment in the market. “It was my best experience in investing,” he said. Other acquisitions came by the way — like a second home, this time in Jacks Hill, upper St Andrew. “It was the accretion from those investments that I used to start the Weststar,” said Campbell of the vehicle he eventually used to take a stake in Capital and Credit.

“The intention was for Weststar to become a lease finance company and then apply to BOJ for merchant bank licence.”

Campbell remembered the period — the late 1980s to the early 1990s as a boom time for the financial services sector, which by then had swelled to more than 30 merchant banks.

“I was seeking to go on my own at a high point at Citizens,” he said. “This was a period of encouragement to people of my ilk to be leader in business. We did our market research which formed the basis of our submission to the BOJ (Bank of Jamaica).”

Weststar started out at Cargill Avenue in Kingston in 1989, and after a few months, with support and encouragement from Danny Williams, moved to 6 Dominica Drive in New Kingston.

Weststar secured a credit line of $5 million from Life of Jamaica to begin its lease financing business. Later another $5 million came from Victoria Mutual.

“We did leases for small car rental companies and others in the manufacturing business,” he said.

By then Campbell’s rent-a-car company, Columbus Car which started in 1986, had grown to a fleet of 20.

In-between he experimented with a trading business, but quickly exited the market, and came back to pursue his core competency and interest: financial services.

“But by then, banking licences were on hold with only Intercontinental and Huntley Manhertz securing licences,” he noted.

Changes in the car import policy in 1993 marked the death knell of small companies like Columbus, which used to turn a profit by selling the cars after two years in service.

“The profit was not made from rental,” explained Campbell. “It was made by keeping the car for two years and selling them back. The used-car opening was the death knell of the small car rental business. Only large players remained. We disposed of the vehicles at a loss in 1993.”

Campbell told the Business Observer that this development helped him to “clear my headspace so that by 1993 it was clear that I wanted to stay in the financial world: stock market investments and finance company”.

That opportunity came when, in 1993 Tower Merchant and Trust Bank was placed in receivership, just a year after the collapse of Jamincorp. No one knew at the time that these little-known failures were the prelude to a systemic banking crisis that would wipe out the indigenous industry and cost the Government billions of dollars.

“There were changes in ownership taking place, especially with consolidation in commercial banks,” Campbell pointed out. For example:

• Citizens had two merchant bank licences and sold one to investors who formed Knutsford Capital.

• Delroy Lindsay, who operated Corporate Merchant, got another licence when he took over Workers. He sold that licence to Elon Beckford who formed Horizon Merchant.

• Island Life bought Lival Investments and called it Island Life Merchant Bank.

• Dyoll bought DCO from Dunn Cox and Orett which became Dyoll Merchant.

“We did not see any opening,” Campbell lamented. “In addition, the Ministry of Finance had become hardened to the view that persons who owned the licence should not be allowed to trade them. So after the initial burst no other licences were sold or purchased.”

But in Tower’s failure there was an opportunity to be grasped.

“A group of persons wanted to rescue the bank, and a friend, in discussions with Broilers, Davon and Andrew Cocking told us about it,” Campbell recalled. “Weststar said it was interested. We initially wanted controlling interest, but idea was shelved.”

That this was one of the best decisions made as a model for ownership and control, Campbell said.

Here’s how he explained it: “It was the best strategy by the group. The absence of controlling interest meant that we had to work together. We had a shareholders agreement that gave proportional representation on the board and placed specific circumstance on which minimum percentage support was required for certain decisions. It ensured that we needed teamwork.

“Most of the major decisions for which consensus was required needed 80 per cent support. Any of the four principal shareholders could prevent the decision. It ensured decisions which are not impulsive. It also generated personal and professional interest among shareholders in the institution.”

The $30 million injected into the institution by the investors eliminated the deficit and left the bank with the statutory minimum capital requirement of $20 million.

“It took us from July 1993 to December 1993 in a series of negotiations and documentation to arrive at how we would resolve the issue of the parlous state of the company,” he said.

“We had to get BOJ and Ministry of Finance approval. Governor (Jacques) Bussières had experienced failure in Zambia. He had to be satisfied that the team had knowledge and resources to make it work.”

The money was injected into the bank through a vehicle formed by the investors called Capital & Credit Holding.

The merchant bank was profitable, literally from day one, and immediately began expanding into a wide range of revenue generating services.

Foreign currency trading was the first to be added.

“At the time only commercial banks were authorised dealers,” noted Campbell. “We had to use the association to lobby for BOJ to open up the FX market. We got that and were able to trade in a lucrative part of the market.”

By 1995 remittance was added through partnership with Ria Express that gave the bank a toehold in Cayman.

The bank later formed C&C Remittance Ltd after Ria in the USA and the Caymanian partners severed their partnership.

“We started to look to UK and USA for other partners,” he said. “Then we formed Express Remittance in Cayman in which we own 40 per cent. We have 8,000 transactions per month from Cayman.”

Later, the securities company — with a seat on the Jamaica Stock Exchange — gave Capital and Credit another revenue stream.

“We wanted to position ourselves as the leading merchant bank in Jamaica with wide range of options.”

According to Campbell, public listing should have taken place in 1999/2000 but the sale by Davon of its shareholdings forced the postponement. The NIF bought Davon’s 27 per cent in 2000.

Even the public listing in 2003 had its challenges, Campbell said.

“The solicitor general took ill when we were about to go public,” he said. “At the same time, the exchange rate started to move and BOJ moved the interest rate from 18 to 34 per cent. Investors backed out at the last minute — with their guaranteed return at 34 per cent. We had to beat the pavement and work on them.”

But the IPO, which was marginally under-subscribed, has been Jamaica’s most successful ever — with the price racing from $5 to over $30 within months, and now settles in the low $20s.

Last year, the bank raised just over $1 billion in a rights issue that will help to fund its expansion plans.

“We are looking to establish a presence in a major English-speaking Caribbean market and in Florida in 2006,” Campbell told the Business Observer. “That will give us the kind of range of products and getting us access to the Diaspora. We are also looking at alliances to strengthen distribution channels.”

Added Campbell: “Our success is largely because of the people we have on our team and the resilience and commitment that we have applied at all levels in the management of the organisation. We at Capital and Credit have a stubbornness not to retreat, because to retreat is to tell yourself that you can’t handle challenges.”