JMMB Group’s Regional Diversification Strategy and Business Line Growth Drive 127% Increase in Profit

Regional financial entity, JMMB Group’s profit has jumped to J$5.49 billion, which is a 127% increase year-over-year for the period ending September 30, 2021. Additionally, the company posted net operating revenue of J$13.47 billion, which is a 25% uptick over the comparative period. This stellar performance by the Group exceeds its pre-pandemic financial profitability and is attributable to the growth in its core business operations and diversification strategy.

In commenting on the Group’s financial performance for the period, Keith Duncan, JMMB Group CEO shared, “We are heartened by this achievement and upward trajectory of our profits, as it reflects our win-win partnership approach and commitment to supporting our clients in achieving their goals by deepening our client intimacy and building out our regional diversification strategy.” Duncan further lauded the team and operations in the Dominican Republic, which contributed 38%, or J$1.68 billion, of the Group’s net earnings for the period, representing an increase of 365% over the prior year profit. 

Regional Diversification Delivers Strong Performance for JMMB Group 
The outstanding performance in the Dominican Republic was largely driven by the Group’s strong positioning in that market, as a dominant player in the investments business line, while also nurturing the start-ups to sustained profitability. As a result, the subsidiaries in the Dominican Republic saw improved performance in banking, fund management and pension business lines. This performance was also supported by continued focus on improved operational efficiencies through the use of technology and process enhancements. 

Additionally, the Group’s stake of 23.22%, in its associate, Sagicor Financial Company (SFC) continues to deliver value, as evidenced by the J$2 billion share of profit, which reflects a 38% contribution to the Group’s profitability for the reporting period. 

The company’s recently released financial results also showed that the Group’s core business operations remain solid, as demonstrated by the growth in all its revenue lines, namely: net interest income, trading gains, fees and commission and foreign exchange trading. This growth was spurred by increased economic activity relative to the prior period as well as continued accommodative monetary policies in the countries in which the Group operates. 

Net interest income grew by 17%, moving from J$4.99 billion to J$5.82 billion. While, trading gains saw a 21% uptick to J$3.88 billion, due to increased market activity and improved global investor sentiment, especially as the global vaccination programme is underway. Additionally, there has been strong demand for emerging market assets as global interest rates remain low and investors search for higher yields. Within this context, JMMB Group continues to successfully execute its trading strategy and has been successful in leveraging market opportunities that has delivered these superior results. Fees and commission income also surged by 66% from J$ 1.5 billion to J$2.52 billion, which reflects increased economic activity as well as significant growth in managed funds and collective investment schemes across the Group. Additionally, foreign exchange gains also increased from J$1.07 billion to J$1.22 billion, which reflects a 14% growth in earnings over the comparative period.

Patrick Ellis, chief financial officer, JMMB Group outlined that as the Group repositioned into growth mode during the reporting period, in keeping with its strategy to continue building out its financial services model, this resulted in an increase in its operational expenses from J$7.16 billion to J$8.86 billion, over the corresponding period. This was largely driven by project-related activities, centered on process optimization and IT infrastructure, as a way to further leverage efficiencies and improving client experience, in addition to inflationary increases. In spite of this increase in expenses, the Group’s operational efficiency remained consistent at 66%. During the reporting period, JMMB Group upgraded its fleet of automated teller machines (ATMs) in Jamaica, to provide clients with the added convenience and an improved client experience, allowing clients to have real-time updates on their accounts and immediate access to cash deposited. Additionally, the Group’s Visa Debit card project concluded in Trinidad and Tobago during which all ATMs are now reconfigured for ‘Chip and Pin’ use by all of the Bank’s Visa debit cardholders. The Group continues to integrate its infrastructure, processes and systems to leverage operational efficiency and standardize operations across the countries in which it operates. 

At the end of the reporting period, the JMMB Group’s asset base totalled J$562.48 billion, up by J$48.8 billion or 9%, relative to the start of the financial year. This is attributed to a larger loan and investment portfolio. Investment portfolio and loans and notes receivable grew by 14% and 10% respectively totaling, J$302.37 billion and J$130.91 billion, correspondingly. 

Over the six-month period, shareholders’ equity increased by 9% to J$66.67 billion. This was largely on driven by the high profitability in the first half of the year, as well as increases in asset prices that resulted in positive movement in investment revaluation reserve.

JMMB Group’s Strategic Outlook
Keith Duncan, in sharing on the strategic outlook of the Group, outlined, “We remain confident in the sustainability of the Group, as we seek to execute our strategic imperatives to ensure that we continue to maximize shareholder value through business line diversification and regional diversification, underpinned by client partnership.” He further noted that the independent analysis by the Caribbean’s leading credit rating agency, CariCRIS, 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. 

Additionally, JMMB Group, in keeping with its diversification strategy will continue to actively pursue inorganic growth opportunities across the region, with its banking business line as a priority, as a means to improve shareholder value, increase its market share, diversify its income stream and expand its footprint; this, even as it builds out its financial solutions to target key segments such as small and medium-sized enterprises (SMEs) and corporates. 

The Group will also continue to accelerate digital transformation, while remaining client-centric in serving clients through an omni-channel approach; thereby allowing clients to use their preferred medium to access JMMB Group’s suite of solutions. Claudine Tracey, chief strategy officer, while speaking at the recently held virtual JMMB Group Investor Briefing shared that as the Group seeks to further build out its digital capabilities, the company will roll out online onboarding; upgrade its fleet of ATMs to smart ATMs in Trinidad and Tobago, for improved efficiency and client experience and introduce artificial intelligence features to also assist clients. 

The Group CEO lauded his team stating, “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.”