JMMB Group Records 119% Growth in Profits, from Diversification Strategy and Core Business Line Growth 

Regional financial entity, JMMB Group is reporting net profit of J$8.82 billion, for the nine-month period ending December 31, 2021. This reflects a 119% uptick in the Group’s earnings year-over-year. Additionally, JMMB Group posted operating revenue of J$21.98 billion, up 33%, for the comparative period. 

In speaking to the strong performance of the Group over the period, Keith Duncan, JMMB Group CEO, outlined that the company continues to reap success from its diversification strategy; deepening of its core business; and build-out of its digital transformation, despite the protracted uncertainty and operational challenges resulting from the pandemic. Duncan notes, “As a result of our regional diversification strategy and continued partnership with our clients, we have seen continued growth in our performance across key markets, most noteworthy of which is the Dominican Republic, which contributed 32%, or J$2.52 billion, of the Group’s operating profit for the period; with Jamaica remaining the dominant market, contributing 57% and a commendable performance in the Trinidad and Tobago market, with 11% contribution to profit.” Additionally, during the quarter, the Dominican Republic banking platform was upgraded to the Group-wide banking platform, which is in keeping with the Group’s strategy to streamline its subsidiaries in order to leverage operational efficiencies and standardization. 

Patrick Ellis, chief financial officer, noted, “the core business lines across the Group demonstrated solid growth, as a result of the largely favourable monetary conditions during most of the reporting period, and increased economic activity, compared to the prior year.” The company’s recently released financial results showed the uptick in Group’s core revenue lines, namely: net interest income, trading gains and foreign exchange trading.

Net interest income grew by 18%, moving to J$8.98 billion from J$7.58 billion. While, trading gains saw a 45% uptick to J$7.15 billion, due to increased market activity and improved global investor sentiment, despite the emergence of new COVID-19 variants dampening economic recovery. 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. Foreign exchange gains increased from J$1.99 billion to J$1.56 billion, which reflects a 28% growth in earnings over the comparative period reflecting increased volume activity. Additionally, fees and commission income  also showed growth from J$2.36 billion to J$3.73 billion, which reflects increased economic activity as well as significant growth in managed funds and collective investment schemes across the Group; thereby providing value-added service to clients. The Group’s earnings was also bolstered by J$115 million in dividends received on equity portfolio. 

Due to the delayed publication of Sagicor Financial Company Limited’s (SFC) audited results for the period ending December 31, 2021, the Group did not record any share of profits from its associated company, SFC, in which it has a 23.22% stake. SFC has opted to publish its audited results for the period, utilizing the 90-day provision under the Toronto Stock Exchange (TSX); therefore, these earnings will be reflected in JMMB Group’s year-end results. 

JMMB Group’s operational expenses during the period moved from J$10.66 billion to J$13.24 billion, which was attributable to inflationary increases, as well as projects related to its longer-term growth. This follows the shift made by the Group to reposition to growth mode, by continuing to build out its integrated financial services model. As a result, these costs was largely driven by project-related activities, centered on process optimization and IT infrastructure, as a way to further leverage efficiencies and improve client experience. In spite of this increase in expenses, the Group’s operational efficiency improved from 64% to 60%. 

During the reporting period, JMMB Group completed an upgrade to 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. As part of the Group’s digital transformation imperative, a similar project to upgrade the current fleet of ATMs to smart ATMs is underway in Trinidad and Tobago.  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$609 billion, up by J$95.30 billion or 19%, 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 23% and 15% respectively totaling, J$327.86 billion and J$137.74 billion, correspondingly. 

Over the nine-month period, shareholders’ equity increased by 7% to J$65.67 billion. This was mainly driven by the profitability of the Group.

JMMB Group’s Strategic Outlook
The Group continues to build out its strategic initiatives by deepening its client partnership and accelerating its digital transformation, in a bid to respond to the changing needs and behaviour of clients. As such, the Group is looking to roll out new projects in the near-term, including a new system to improve loan processing and has recently entered into an agreement with Norbrook Transaction Services, to re-introduce the ePay card solution aimed at widening clients’ payment options. 

Additionally, JMMB Group, as part of its diversification strategy, will continue to actively explore value-creating inorganic growth opportunities across the region, as a means to improve shareholder value, increase its market share, diversify its income stream and expand its footprint. With prioritization being placed on building out the banking business line, at this time, there has been increased support to target key segments such as small and medium sized enterprises (SMEs) and corporates. As evidence of this, JMMB Bank has increased access to financing to SMEs, through agreements signed with multilateral partners, over the period.  Of the US$66 million in multilateral funding accessed to support the SME sector, women-led SMEs have been allocated at least US$13 million. 

The Group CEO revealed that the JMMB Group of the future will continue to expand and enhance offerings to include payment services, mobile and other online experiences and data analytics tools to better serve clients, with a ‘client first’ approach; even as the Group continues to pursue its regional diversification strategy, which has resulted in its solid financial performance and win-win partnership for its stakeholders.