JMMB Group Posts J$1.6B in Net Profit for Q2

While posting a 5% increase in operating revenue, of J$8.13 billion, for the quarter ended September 30, 2017, the JMMB Group reported a net profit of J$1.67 billion for the same period, a decline of 18% over the prior comparative period. This was as a result of the build-out of the Group’s integrated financial services business model,  marked by the launch of its commercial banking operations in Jamaica, and the introduction of its pensions fund management business – JMMB Administradora de Fondos de Pensiones (JMMB AFP) – in the Dominican Republic (a market in which JMMB celebrates 10 years of operations).

The costs associated with these roll-outs drove a 15% increase, over the prior year, in the Group’s operating expenses, ending the reporting period at J$5.83 billion. The introduction of JMMB Bank (Jamaica) Ltd. saw upgrades being made to the prior JMMB Merchant Bank’s operations and infrastructure and enhancements to the bank’s technology platform; which is expected to improve operational efficiency and allow for a seamless integration with the rest of the JMMB Group, in keeping with the financial life goals center approach. Additionally, the costs associated with the enhancement of its integrated Group sales and support framework, and the costs associated with the launch of the pension fund business in the Dominican Republic which also impacted the Group’s operational expenses, were fully reflected in this reporting period,

 

Since rolling-out JMMB Bank in Jamaica, the subsidiary has added demand accounts – savings and chequeing accounts, expanded its loan solutions to include home loans with longer tenures and a suite of offerings tailored to small and medium-sized entities; in addition to upgrading its online banking platform. The expansion of the Bank’s suite of offering is expected to attract a broader cross-section of clients while also providing the Group with the opportunity to offer a complete suite of financial solutions to assist individuals and businesses to achieve their goals.  While in the Dominican Republic, the introduction of JMMB AFP enables JMMB to tap the retirement planning and savings market, as individuals take advantage of the competitive landscape. 

 

The Group achieved a credible performance in the growth of its net interest income and fees and commission income. Net interest income for the reporting period stood at J$3.76 billion, reflecting growth of 15%, or J$499.6 million. This resulted from strong growth in the earning portfolios, namely the investment and loan portfolios across the Group. Additionally, the Group’s spread management strategy for the period proved effective. While fees and commission income saw an uptick of 44% or J$791.1 million, with significant growth in managed funds and collective investment schemes (CIS) across the Group. 

The Group’s overall performance was however impacted by a decline in net gains on securities trading and net foreign exchange trading, when compared to the prior period. Net gains in securities trading totaled J$3.01 billion, or J$179.30 million lower than the prior period. However, during the prior period there was significant trading gains as a result of market conditions, which included a one-off foreign exchange market opportunity.

 

While, JMMB Group’s total assets for the period amounted to J$275.58 billion, up J$24.03 billion, or 10%, compared to the end of March 2017. This was mainly on account of higher cash holdings as well as larger loans and investment portfolios. 
This growth in asset base was funded by clients’ deposit and repurchase agreements, which increased by J$2.11 billion and J$173.70 billion, respectively.

Additionally, the entities across the Group remain adequately capitalized, exceeding regulatory capital requirements, as evidenced by the Group’s increase in its equity base, thereby ending the period at J$29.37 billion.

 

In sharing the way forward, Keith Duncan, JMMB Group CEO noted that with the build out of its financial life goals centre, the Group is better poised to leverage the new efficiencies and synergies from the addition of these two new business lines, while also offering a full suite of financial solutions that will help individuals and businesses to achieve their goals.  He added that the company is pleased to celebrate 25 years of serving its clients and fulfilling the initial vision of our co-founders, Dr. Noel Lyon and the late Joan Duncan, of creating a unique working environment and contributing to the well-being of others. The Group will continue to build out and further establish itself as a financial life goals centre providing financial coaching, rooted in love and the best interest of all- clients, team members and nation.