JMMB Group Eyes Digitization, Operational Efficiency & Inorganic Growth, to Boost Profitability 

During its first virtual annual general meeting, the JMMB Group highlighted increased focus on digitization, improved operational efficiency and inorganic growth, as key imperatives to drive its profitability over this financial year and beyond. 

Keith Duncan, JMMB Group CEO, in his presentation, outlined that the company has been making strides in digitizing its processes and information technology platforms; in a bid to make client financial partnership more seamless and accessible, noting that the COVID-19 pandemic has accelerated the company’s move to do so. Duncan, while acknowledging that JMMB Group experienced some IT challenges during its recent implementation of its bank standardization process in September, invited shareholders and clients to bear with the company, as it seeks to work to rectify these “teething pains,” and promised an improved client experience and added value for clients. In underscoring the thrust towards a digital approach, head of the JMMB Group Trinidad and Tobago operations, Ronald Carter, highlighted that the growth in the market share of JMMB Express Finance (TT), the consumer finance arm, has grown to 5% within 2 years. He further explained that approximately 40% of that subsidiary’s client base sought to access its offerings largely through online channels, even pre-COVID, and this continues to be an area of growth.

Additionally, Duncan pointed to the roll out of JMMB Group’s (initial public offer) IPO feature on the JMMB online platform, Moneyline, that has been facilitating greater participation of its clients in the stock market and made the process seamless. The feature, which was introduced ahead of the Group’s additional public offer (APO), a first to the Jamaican market, saw the company raising J$12.4 billion, across Jamaica and Trinidad & Tobago. The platform has subsequently been used in other offers namely: TransJamaica Highway, where JMMB Securities was a co-broker; Caribbean Assurance Brokers; Tropical Battery and the Barita APO, helping to raise over J$40 billion on the stock market, since its inception.

The company has since the start of the calendar year, as part of its digital transformation process, introduced its Visa-enabled debit card, real-time trading, JMMB Moneyline online sign up, and is slated to begin the roll-out of intelligent automated teller machines (ATMs), by the end of the financial year. This will allow for more financial services to be at clients’ fingertips, in keeping with the changing behaviour of clients, in the new normal environment. 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. Keith noted that in addition to enhancing the client experience, the digital transformation lays the foundation for improving the company’s operational efficiency. 

It is against this background JMMB Group chief financial officer, Patrick Ellis, reported that the JMMB Group saw an increase in its operational expenses over the financial period ending March 31, 2020. He attributes the uptick to the setting of “the stage to facilitate future growth of the company, through the standardization of the Group’s IT platforms across the region; in addition to reorganizing and structuring the Group, so that it can be fully compliant with our consolidation supervision and regulatory reporting, but also in terms of that efficiency of serving our clients and meeting their needs.” Ellis indicated that the Group is aiming to significantly reduce its efficiency ratio over the long-term, without compromising its business model, which sees client intimacy at the forefront. This reduced target would, therefore, mean increased profitability for the Group. 

Solid Financial Performance Forms Foundation for Growth 
The CFO also noted the impact of the acquisition of 22.5% Sagicor Financial Corporation (SFC), which makes JMMB Group the single largest shareholder, a move that is in keeping with the Group’s strategic direction to grow through inorganic means. Ellis underscored the value of the transaction so far, noting, “We generated a one-off gain of J$2.8 billion but also what we expect annually going forward (is an) annual contribution in terms of share of profit of all such core earnings of SFC…(which) will accrue to JMMB, so that's guaranteed revenue on our income statement on an annual basis; in addition to that, we (will) also generate any dividend distribution accrued to the JMMB Group as well…which impacts our cash flow and our liquidity in a positive manner. 

Patrick reassured shareholders that the Group has built a solid foundation to facilitate its growth, both organically and inorganically, as evidenced by its solid track record of performance. As evidence of this, the Group’s earnings over the last financial year, he shared, “…generated net earnings of J$7.1 billion, moving from J$3.8 billion and it's important that we look at the context of our earnings and that's an increase of J$3.2 billion or 83 percent growth, and if you look at the different layers of our income statement you will see that our operating profit which is where our core earnings are being generated from, we were up.” Adding, “What is driving that growth is the core pillars (so) that we will have sustainable earnings,” pointing to an increase of 5% and 51% respectively, in the company’s net interest income and gains and securities trading; in addition, to significant growth in funds under management of 21% and a 34% growth in transaction volume of the capital market segment. 

JMMB Group’s banking operations, across the three territories in which it operates, have also seen strong growth, outpacing the market, while maintaining a low non-performing loan portfolio. The Group’s money transfer arm has also seen stellar growth of 32% operating profit, over the 2019/2020 financial year. In addition, the Group has made good on its promise to build-out its small and medium enterprise segment, with the launch of SME solutions in the Dominican Republic (DR) and opening of its SME resource centre in Jamaica and Trinidad and Tobago, in a bid to better partner with this segment to generate growth in the economy. In May 2020, JMMB Express Finance (Trinidad and Tobago), the consumer financing arm of the Group, the newest start up, also began contributing to the profit of the Group; in addition to opening 2 additional branches over the last financial year. 

JMMB Group Eyes Inorganic Growth 
Having had a strategic response to COVID-19, initially centred on protecting its clients and ensuring the sustainability of the JMMB Group during and post the COVID-19 pandemic, the company has now turned its attention to reassessing, rebounding and re-imagining for the future. As the countries in the region have been reopening their economies on a phased basis and the COVID-19 threat is better understood and managed, the JMMB Group is seeking to further pursue inorganic growth to bolster the organic growth it has experienced, over the last financial year. Chief strategy officer at JMMB, Claudine Tracey, outlined, key areas of new growth would be centered on expanding its banking business line inorganically, as well as expanding into new markets in the near future, even as the Group seeks to increase market share across all markets in its existing business lines, in addition to continuing to expand and enhance offerings within the unbanked segment with new payment, insurance and lending solutions.