JMMB Group Records First Quarter Profits of J$780M

JMMB Group has reported net profit of J$780.2 million, for the first quarter of its 2020/2021 financial year ending June 30, which represents a decline of 30% for the comparative 2019 quarter; due to the economic slowdown and uncertainty in the market, as a result of the COVID-19 pandemic.

In explaining, Patrick Ellis, chief financial officer at JMMB Group, outlined, “The company’s financial performance remains stable, even as we saw a dip in our profit, this, as core earnings remain positive and expenses are managed in line with the prevailing market conditions.” The JMMB Group also posted J$5.0 billion in operating revenue, which is a 14% decline year-over-year. For the period ending June 30, there was growth of 10% in the company’s net interest income, totaling J$2.4 billion, as a result of the solid growth in loan and investment portfolios, which demonstrates the confidence and value derived by clients from the financial solutions offered by the JMMB Group. Additionally, fees and commission income was constant at J$720 million, compared to J$737 million, in the prior period, which reflects a 2% decline in earnings, due to a slight reduction in volumes. 

The pandemic has also impacted the JMMB Group’s year-over-year growth and profits, because of the overall shrinkage in the local economic environment over the period, April – June 2020. Whereby, there was a downturn in trading activity, as the market reacted to the uncertainties brought on by the COVID-19 pandemic and slowdown in economic activities, regionally and globally, as governments implemented varying protocols to reduce the spread of COVID-19. Consequently, the company’s gains on securities trading and foreign exchange earnings wasJ$1.3 billion and J$527.8 million, respectively, which is a corresponding decline of 40% and 29%. 

The share of profit from Sagicor Financial Corporation Limited (SFC) was also adversely impacted by the pandemic, which resulted in our share of losses of J$8.9 million, for the quarter. This was primarily related to higher than expected credit losses (ECLs), as well as an internal reinsurance transaction that resulted in a strengthening of the reserves. Having announced the acquisition of 22.5% of Sagicor Financial Corporation Limited (SFC), in December 2019, the JMMB Group remains positive about its investment in SFC; as the Group expects improved financial performance from SFC, over the short-term.  JMMB Group CEO, Keith Duncan notes, “The core earnings of SFC remain viable and is expected to materially contribute to shareholders’ value in a positive manner, even as it adds diversification and the opportunity for JMMB Group to participate in the future growth of the market leader in the Caribbean’s insurance, pension and asset management sectors.”

Additionally, the company saw a decrease in its operational expenses to J$3.71 billion, a 3% decline, in line with the reduction in business activities and cost containment strategies being implemented by the Group as part of its prioritization of its efficiency related projects. 

JMMB Group Stands on Stable & Solid Financial Foundation
JMMB Group CEO, further expressed optimism that the regional financial conglomerate – JMMB Group - showed credible results in the challenging economic environment. He further outlines, “With the reopening of the economy, and as Jamaica and the region adjusts to the ‘new normal,’ we expect to see improved performance, though tempered growth in the economy. This will augur well for the company and its growth prospects and profitability.”

At the end of the period, the JMMB Group’s asset base totaled J$431.8 billion, up J$31.57 billion or 8% relative to the start of the financial year. This increase is attributable to a larger loan and investment portfolio. Growth in the asset base over the three-month period was funded by increases in deposits and repos. Client deposits increased by J$4.72 billion or 5% to J$108.90 billion, while repos grew by J$19.65 billion or 11% to J$199.24 billion.

The company has also sought to further strengthen its capital base and further manage its expenses, as such, the Group continues to focus on extracting operational efficiency from all entities, through the streamlining of its processes, procedures and information technology platforms. The Group CFO added, “we remain adequately capitalized, exceeding regulatory capital requirements, with an uptick in shareholders’ equity of J$46.95 billion, or 14%.” This was largely on account of the profitability for the quarter and rebound in emerging market bond prices, which resulted in positive movement in the investment revaluation reserve.

Similarly, in response to the challenges faced by our clients and as part of our commitment to deliver value to them, “the company has provided  increased support to clients, with a view to help them to navigate the COVID-19 crisis by offering special relief packages, financial education and additional advisory services,” said Duncan. Additionally, in a bid to improve the client experience and to continue to safely and conveniently serve clients, the JMMB Group has further bolstered its digital marketing and communication capabilities and client care and enhanced its online transaction platform, JMMB Moneyline, which now boasts real-time trading. 

Keith Duncan, in sharing on the strategic outlook of the Group, outlined, “The JMMB Group has the financial foundation to withstand this new economic reality, and we remain focused on the strategic plan that will see us continually reassessing and re-imagining new opportunities to expand and grow our revenue and diversify our income stream; even as we seek to further strengthen our business model to remain resilient in the ‘new normal’.” Adding, “We remain hopeful and confident in the sustainability of the Group and expect to continue seeing realized value for all our shareholders, clients and team members, as we explore accretive business development opportunities to grow our return on equity and expand our footprint.”