JMMB Group Records J$2.55B in Net Profit for First Quarter
Regional integrated financial services provider, The JMMB Group, recorded J$2.55 billion in net profit for the first quarter of its new financial year, ending June 30, while posting operating revenue of J$6.59 billion for the period.
Patrick Ellis, chief financial officer at JMMB Group, noted that the company’s performance remains stable and underscores the positive impact of the Group’s regional diversification strategy which has allowed the Group to maintain credible performance in spite of the challenging macroeconomic environment, characterized by higher global interest rates. In explaining further Ellis shared, “The Group has been able to leverage operations in the Trinidad and Tobago market, which has not been affected by interest rate hikes by the central bank. Additionally, its Dominican Republic operations positively contributed to its profitability, as a result of improved market conditions with the easing of interest rate hikes in that country.”
JMMB Group also benefitted from its 23.33% share in Sagicor Financial Corporation (SFC), which reeled in J$1.73 billion in share of profit in its associate and received J$64.75 million in dividends, over three-month. This compares to the share of loss of J$2.9 billion recorded for the comparative period, as a result of the adoption of IFRS 17 – Insurance Contracts, by SFC, as at January 1, 2023. As such, the prior year’s financial result was restated and therefore showed a loss.
Reiterating the value of its diversification strategy, Keith Duncan, JMMB Group CEO outlined, “As the Group continues to leverage inorganic growth opportunities and bolster its revenue streams with its smart growth strategy, the company has been able to deliver credible performance, in a high inflationary environment that has historically seen key revenue streams namely: net interest income and gains on securities trading, driving profitability.” He pointed to the strong performance of the banking and related services and the Group’s plans to continue to diversify its revenue, its investments in real estate and other alternate investments and further build-out of its payment services, strong capital management, and growing core activities, as key drivers for its stable performance over the period.
In detailing the performance of JMMB Group’s core earnings Ellis shared, rising interest rates and market sentiment negatively impacted net interest income, which saw a 28% falloff to J$2.10 billion. Additionally, foreign exchange trading dipped by 24%, moving from J$883 million to J$673 million, driven by tight liquidity in the market; while fees and commission income decreased by 17% over the comparative period, totaling, J$1.39 billion. Although regular trading activities remains low, JMMB Group took advantage of market opportunities, coupled with more accommodative conditions in the Dominican Republic over the period, which resulted in the Group seeing a 131% jump in gains on securities trading, moving from J$ 1.03 billion to J$2.36 billion.
The Group’s asset base totalled J$679.6 billion, up 3% compared to the start of the 2023/24 financial year. This was mainly on account of a larger loan portfolio which grew by 6% to J$189 billion. The credit quality of the loan portfolio continued to be comparable to international standards and the Group continues to maintain enhanced monitoring to mitigate against possible deterioration in credit quality. Growth in the asset base over the three-month period was primarily funded by an increase in customer deposits. Deposits grew by 6% to J$182.70 billion.
Over the three-month period, shareholders’ equity increased by 13% to J$56 billion, on account of increased profits posted as well as an improvement in the investment revaluation reserve. The Group remains adequately capitalized and all individually regulated com
panies within the Group continues to exceed regulatory capital requirements.
As the Group continues to build out its strategic imperatives, it saw a marginal increase in its operational expenses from J$5.32 billion to J$5.82 billion, over the corresponding period. This largely reflects the inflationary increases and long-term project-related activities to support the strategic position of the Group.
Strategic Outlook
Duncan in his outlook for the financial year indicated, “JMMB Group will continue to deliver value to its shareholders, with stable and solid performance, even as we remain cautiously optimistic that market conditions will gradually improve, as central banks slow down the pace of or pause rate hikes as global headline inflation is expected to 5.2% in 2024, according to International Monetary Fund (IMF) World Bank outlook.” The JMMB Group continues to build out offerings to its small and medium-sized enterprise (SME) client segment and diversify its revenue stream, as seen with the recent closure of a second deal as part of its alternative investment portfolio through Vertex SME Holdings, in line with its smart growth strategy. The Group has also made moves in deepening its presence in the payment space through its digital offerings, designed to meet the changing needs and preferences of its clients, while bolstering its core business lines and exploring future growth opportunities through acquisitions across the region.