JMMB Group Records J$7.7B in Profit 

JMMB Group reported J$7.7 billion in net profit, for the financial year ending March 31, 2021, which reflects a 9% increase when compared to the prior year. The regional financial conglomerate’s net operating revenue grew by 5% to J$22.6 billion, when compared year-over year. 

In commenting on the company’s financial performance, JMMB Group Chief Financial Officer, Patrick Ellis, outlined the results are commendable and demonstrates the resilience of the company’s core earnings, in addition to the ability of the team to leverage opportunities and maximize operational efficiencies. The CFO further noted, “The credible performance of the Group is a testament to our core earnings, as the company’s profit has shown signs of rebounding to pre-COVID-19 financial performance. This is noteworthy, as the reporting period would have coincided with significant economic slowdown and uncertainty in the market, as a result of the pandemic.” 

The company’s recently released audited financial results showed that the Group’s performance was largely driven by growth in its core business operations, namely: net interest income, net gains on securities trading; and other fees earned from managing clients’ funds, in addition to its share of profit from its associate. 

Net interest income grew by 13%, totaling J$10.5 billion, as a result of the solid growth in loan and investment portfolios. Net gains on securities traded also grew by 10% to J$6.8 billion, which was largely attributable to the improved appetite for emerging market assets especially in the second half of the year, and the Group taking advantage of market opportunities. Fees earned from managing clients’ funds contributed J$1.5 billion to the Group’s earnings, which reflects a 5% increase and resulted from growth in managed funds and collective investment schemes.

In addition to core operations, JMMB Group reeled in approximately J$1.9 billion in share of profit of associate, Sagicor Financial Company Limited (SFC). Ellis noted that the associate’s contribution to the Group’s earnings underscores the value of the investment and the Group’s strategic direction to diversify its income stream through inorganic means. In addition, the company’s cash flow and liquidity were positively impacted as the Group received dividends of J$698.4 million; having acquired 22.5% in December 2019, and subsequently increased its shareholding to 22.73%, in 2021 as a result of share buyback.

The company’s earnings from foreign exchange trading gains dipped by 31% or J$880.8 million, amounting to J$1.9 billion, as a result of economic slowdown over the period. Additionally, fees and commission income saw a decline of J$383 million or 18%, amounting to J$1.7 billion; this was spurred by tempered capital markets operations. Ellis further explained that the decline in earnings from these revenue streams were expected given the decline in economic activity as a result of the pandemic.

He however expressed optimism that as the region looks forward to economic recovery in the near-term. This as key global markets have shown positive signs, with the roll-out of vaccination programmes and the resulting improved market confidence. The CFO expects a rebound of these revenue streams and that JMMB Group’s core earnings in these areas will rebound and its overall core earnings will continue on its positive trajectory. 

This positive outlook was further echoed by regional credit rating agency CariCRIS who, in October 2020, reaffirmed the overall ‘good creditworthiness’ ratings (jmA/A+), despite the uncertainty of the COVID-19 environment. According to CariCRIS, “despite the negative impact of the coronavirus on economic activity in Jamaica and the wider Caribbean region, the Group’s financial performance will continue to be good over the next 12-15 months …”. This is a significant independent affirmation of JMMB’s performance and strategy, which the company has delivered on. 

JMMB Group has also made strides in streamlining its operational expenses, in line with lower business activity coupled with cost containment strategies implemented by the Group; even as the company continues with the build-out of information technology platforms, processes and procedures, as part of its standardization of its operations. As a result, the company saw a J$1.4 billion decline in it operational expenses, year-over-year, totaling J$14.5 billion. 

At the end of the 2020/21 financial year, the JMMB Group’s asset base totaled J$513.7 billion, an increase of J$114 billion, or a 28% increase, compared to the start of the financial year. This increase is attributable to a larger loan portfolio and investment securities.

JMMB Group’s Strategic Outlook 
Keith Duncan, in sharing the strategic outlook of the Group, outlined, “The JMMB Group has demonstrated that it has the financial foundation to withstand this new economic reality, with a strategic plan that is focused on leveraging new opportunities to expand and grow our revenue and diversify our income stream; even as we further strengthen our business model to remain resilient.” Adding, “Our teams will remain focused on accelerating digitization, in keeping with the changing behaviour and needs of clients and the wider market.” Having rolled out several offerings via its digital channels including: JMMB Moneyline online sign-up and add-ons to improve trading activity, and real-time trading; the company is slated to begin the roll-out of intelligent automated teller machines (ATMs), over the upcoming quarter.  In sharing more about its digital roadmap, the CEO notes, “JMMB Group is also looking to introduce, in the near-term, online client onboarding which will facilitate even greater access to its suite of offerings: investments, banking, pension funds management and administration, insurance brokerage and money transfer, via an online portal.” 

Duncan reassured clients that even as it moves towards integrating more digital offerings it will seek to maintain its client intimacy and partnership. This process is however, designed to allow for more financial services to be at clients’ fingertips and lays the foundation for improving the company’s operational efficiency. 

The Group will continue to provide value for all its shareholders, clients and team members, as it explores accretive business development opportunities to grow return on equity and expand its footprint; even as it seeks to further target small and medium-sized enterprises, with a range of financial solutions to promote growth in this sector. In addition, the Group is also looking to continue to build out its consumer financing subsidiary, JMMB Express Finance.