CariCRIS Reaffirms Overall ‘Good Creditworthiness’ Ratings & Assigns Positive Outlook to JMMB Group Limited

Caribbean Information and Credit Rating Services Limited (CariCRIS), in a statement issued in October, has reaffirmed the issuer/corporate credit ratings of jmA+ (Local Currency Rating) and jmA (Foreign Currency Rating) on the Jamaica national scale to JMMB Group Limited (JMMBGL). These national scale ratings indicate good creditworthiness of JMMBGL compared to other obligors in Jamaica. 

CariCRIS has also assigned a positive outlook on the ratings. The positive outlook is based on the expectation that over the next 12-15 months, JMMB Group will continue to record strong profitability leading to good return on assets and on equity metrics. CariCRIS expects that the Group’s performance will be bolstered by its increased market presence in the Caribbean, as well as the positive benefits to be derived through its 22.85% stake in Sagicor Financial Company Limited (SFC). Additionally, as the Group continues to implement measures geared towards standardising and integrating its regional operations it is expected that this will support its growth and improved operating efficiencies. 

The ratings agency in its statement said, “The ratings are supported by the Group’s strong brand equity, long history of operations in the Jamaican securities industry, and the diversification of its revenue. This brand equity has allowed the Group to continue its expansion across the Caribbean region. Additionally, JMMB Group’s well-diversified asset portfolio, characterized by good asset quality, has underpinned (its) strong financial performance. In FY2021, JMMBGL’s financial performance was also bolstered by its investment in SFC, which is expected to continue to provide strong earnings growth. Furthermore, the Group’s comfortable capitalisation, reflected in good capital adequacy ratios, as well as a robust governance structure and risk management practices also support the ratings.” 

As evidence of the Group’s solid financial performance, for the first quarter, ending June 30, 2021, the financial conglomerate saw a jump in its profit to J$1.93B; which reflects growth of 148% year-over-year. Additionally, the Group posted net operating revenue of J$6.86 billion, which was an increase of 37%, year-over-year, as a result of growth in core business operations.

Keith Duncan, JMMB Group CEO in reacting to the positive rating shared, “We are pleased that the independent analysis by the Caribbean’s leading credit rating agency has underscored the solid performance of the Group, and has also upgraded its outlook from stable to positive, which bolsters the confidence in the long-term value that we expect to provide to our stakeholders. I have to commend the team for the stellar work and commitment to serving our clients and building out our strategy so that we can continue to drive our profitability and shareholder value, as we leverage our diversification strategy and accelerate our digital thrust.”  

The rating agency cautioned that these rating strengths are tempered by the Group’s funding base which continues to be characterized by moderate concentration in repurchase agreement (repo) instruments, contributing to asset/liability mismatches and high gearing. Further, the sluggish economic conditions in its main operating territories, tempers the ratings.