JMMB Group Diversification Strategy Pays Off

The JMMB Group, during its end of year investor briefing on June 9, shared that its diversification strategy, across business lines, geographies and client segments, has resulted in it hitting its highest ever profit of J$12.02 billion, for the 2021/22 financial year, which represents a 56% jump year-over-year. 

In delving into the details of the Group’s performance chief financial officer (CFO), Patrick Ellis, highlighted “the very strong earnings coming out of the Dominican Republic (DR), (resulted from the team taking) advantage of favorable market opportunities and Trinidad and Tobago rebounding, (while) Jamaica continues to be the flagship.” The Group’s operations in the Dominican Republic, contributed 23% or J$2.8 billion of net profit, while its Trinidad and Tobago operations added 7% or J$768 million to net earnings, which represents a 400% growth in that country’s profit year-over-year. Jamaica’s performance remained stable adding 28% or J$3.4 billion to the Group’s bottom line. 

The management and board is pleased with the value that its 23.29% investment in Sagicor Financial Company has provided, to complement its core operations. JMMB Group reeled in approximately J$5.03 billion in share of profit of its associate in the 2021/22 financial year and amassed J$1.1 billion in dividends.

Juan Melo, chief country officer, JMMB Group- Dominican Republic shared, “Our performance was (driven) by our capabilities on the trading side, (as) we were able to take advantage of the market conditions, in terms of very low rates because the central bank (was) pushing for economic growth after the (onset of the) pandemic and promoting the recovery of the economy.” Additionally, the team leveraged its expertise to capitalize on market opportunities. “Our funds management company, SAFI, (also) launched our sustainable energy fund which targets primarily renewable energy sources, like sun and wind, and that fund has already attracted US$24 million dollars in funds under management,” shared Melo.” 

This strong performance in the Dominican Republic was underscored by credit rating agency, Pacific Credit Rating (PCR), that recently upgraded Banco Ahorro y Credito Rio (Banco Rio) JMMB Bank’s rating to a BBB+; while the investments arm, Puesto de Bolsa, received an A- rating from credit rating agency, Feller Rate.

Shawn Moses, the newly appointed CEO at JMMB Bank (Trinidad & Tobago) notes that in spite of the prolonged pandemic conditions and the impact of geopolitical tensions from the Russia/Ukraine war, all its subsidiaries saw commendable growth; with JMMB Express Finance (T&T), seeing standout performance of 208% increase in profit. The Bank CEO credits the improved performance of the Trinidad and Tobago operations to the economic recovery in that country, in the later part of the financial year, as government restrictions became more relaxed and industries began to reopen. 

In sharing a positive outlook for that country, Moses outlined that with the fallout as a result of the war, global oil prices have been impacted, as such Trinidad and Tobago has seen an improvement in its revenue as a gas and oil producing country. As evidence of the improved macroeconomic conditions, the Trinidad and Tobago Minister of Finance reported a TT$ 654 million budget surplus, at the mid-year budget review, compared to the projected deficit of TT$4.75 billion. He also noted that the central bank has not announced any interest rate increase, unlike Jamaica and the Dominican Republic. Furthermore, additional government spending is expected on major projects and the reopening of industries are expected to continue to drive an improved macro-economic climate. 

The favourably outlook in Trinidad and Tobago augurs well for JMMB Group as the diversification across the region is expected to bolster the Group’s position, in what Duncan foresees as a challenging economic environment, especially in Jamaica and the Dominican Republic, which are characterized by tightened monetary policies and high inflationary environment.  The Group CEO reiterated, “We are prepared as we normally are, to face this (challenging economic environment) as we know that diversification helps us, (and) we expect stronger results out of Trinidad and Tobago… and continue to grow our banking business line and our investments business lines.”

Claudine Tracey, group chief strategy officer also added that JMMB Group remains committed to pursue inorganic growth by constantly exploring market opportunities that fit within the Group’s diversification strategy. She also shared that JMMB Group is still in the process of pursuing two transactions in the region that it had announced earlier. In explaining further, Tracey said, “These acquisitions are in the regulatory stage, and as a multi-jurisdictional Group that wants to expand operations outside of the three territories it now operates, this regulatory process takes time (but) these two transactions remain in our pipeline and we are very excited around them and we continue to have an active M&A (merger and acquisition) portfolio.” 

To complement the geographic diversification, the Group CEO outlined that JMMB is looking to also diversify offerings to its client segments, with the roll-out new solutions in the near term such as point-of-sales, which is important in serving especially its small and medium-sized (SME) client base. Additionally, investment management and corporate payment solutions products will also allow the Group to embed diversification in its revenue streams, and maximize income from non-capital absorbing lines. Duncan also highlighted the strong and consistent performance of the Group’s remittance subsidiary, JMMB Money Transfer, that has continued to increase its contribution to the Group’s earnings and grow ahead of its industry.

The Group will continue to accelerate its digital strategy in a bid to serve the changing needs of its clients. “Within two years all of our clients will be able to have a full digital experience if they so desire and the way that we are doing it, is that our clients will be able to move between our digital and physical channels as they need to, or as they desire, so that we are always in the client's world,” shared Patricia Sutherland, chief operations officer, JMMB Group in providing an update on the Group’s digital plans. 

She also revealed that the eagerly anticipated digital onboarding, mobile app and upgraded online banking will be available in the near term, although not sharing a specific timeline.