JMMB profits up 83%, hitting over $7 billion
JMMB Group CEO Keith Duncan
JMMB Group reported $7.1 billion in net profit, for the financial year ending March 31, 2020, which reflects an 83 per cent uptick in the regional financial entity’s profit, when compared to the prior year.
Additionally, the group posted net operating revenue of $21.6 billion, which is an increase of 19 per cent, year-over year; as a result of growth in core business operations and organic growth in its portfolio.
In commenting on the company’s performance, JMMB Group CEO, Keith Duncan, outlined that as the company operates in unprecedented times, JMMB Group will continue to seek to leverage opportunities to provide shareholder value and offer clients financial solutions suited to their needs.
“The JMMB Group performance in the last financial year is in line with our target growth over this strategic period, and reflects our commitment to our goals, even as we remain optimistic that our local economy will rebound, as we see other countries in the Caribbean also reopening their economies and the respective governments putting in place policies and other measures to mitigate against any further economic, social and health fallout.”
He added: “We are proud of the tremendous work that the JMMB Group team has done over the financial year, to enable organic and inorganic growth across the region, while seeking to further embed financial partnership, maximise operational efficiencies and streamline our processes. The year ahead will present challenges, but as possibility thinkers we are confident in our abilities to respond, reassess, rebound and reinforce the solid financial foundation that we have put in place.”
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; foreign exchange trading gains; fees and commission income and other fees earned from managing clients’ funds.
Net interest income also grew by five per cent, totaling $9.28 billion, as a result of the solid growth in loan and investment portfolios.
Net gains on securities traded saw a commendable growth of 51 per cent to $6.17 billion, which was largely attributable to the improved appetite for emerging market assets, and the company taking advantage of market opportunities.
Foreign exchange trading gains saw growth of $410.4 million, or 17 per cent, amounting to $2.81 billion, as a result of increased trading activity and growth in the regional markets, over the period. Additionally, fees and commission income had a significant uptick of 48 per cent, amounting to $2.11 billion; this was spurred by capital markets operations, across the JMMB Group.
Others fees earned from managing clients’ funds grew by 24 per cent, contributing $1.41 billion to the group’s earnings, as a result of growth in managed funds and collective investment schemes.
The JMMB Group also reeled in $195.2 million in share of profit of associate, Sagicor Financial Company Limited (SFC). JMMB Group announced the acquisition of 22.5 per cent of Sagicor Financial Company Limited (SFC), in December 2019, which gives the group diversification and the opportunity to participate in the future growth of the market leader in the Caribbean’s insurance, pension and asset management sectors.
Also during the year, JMMB saw an increase of 23 per cent in its operating expenses, year-over year.
This increase in expenses was primarily driven by the costs associated with the continued build-out of commercial banking activities including the rolling-out of standardisation of our banking platform across the region, expansion of JMMB Express Finance, in Trinidad & Tobago over the year, and staff and professional costs.
Project-related activities, centered on process optimization and IT infrastructure, as a way to further leverage efficiencies, also attributed to the increased operational expenses. In the process of rolling out standardization of our banking platform across the region.
At the end of the 2019/20 financial year, the JMMB Group’s asset base totaled $400.22 billion, an increase of $80.18 million, or a 25 per cent increase, compared to the start of the financial year. This increase is attributable to a larger loan portfolio, as well as investments in associated company, SFC.
Cheif Financial Officer at JMMB Group, Patrick Ellis
JMMB Group chief financial officer (CFO), Patrick Ellis, in disclosing further details of JMMB Group’s financial position, reiterated that “JMMB Group is built on a solid financial foundation, as evidenced by its positive core earnings, continued growth and a diversified strategy.“
This, he said, will enable the company to be resilient in the challenging economic climate, as a result of the COVID-19 pandemic.
The group CFO further outlined, “We remain adequately capitalised, exceeding regulatory capital requirements, with a substantial increase in shareholders’ equity of $41.18 billion, or 32 per cent.”
The regional financial entity’s shareholders equity was bolstered by the group’s additional public offer (APO), in November 2019, which raised $12.4 billion, the largest APO of its kind, in Jamaica.
This transaction will further facilitate the JMMB’s expansion and diversification strategy, through acquisitions and the addition of new business lines.
In light of the ‘new normal’ that has been created by the COVID-19 pandemic, the group has also sought to respond by delivering value to its clients, and ensuring their protection, in addition to easing the financial burdens of the most vulnerable clients who may be threatened by the economic fallout of COVID-19.
As such, the financial conglomerate in extending a lifeline, in April 2020, aimed to cushion possible blows to select businesses and individuals impacted, primarily those in the tourism and hospitality sectors, transportation and entertainment. The entity provided financial lifelines in the form of moratoriums, extended credit facilities, and the maintenance of its pre-existing 'no late payment policy' on loans.
This underscores the group’s partnership with its clients to safeguard their sustainability throughout this period, especially given the fact that some of these small and medium-sized enterprises (SMEs) are major contributors to the economy.
The JMMB CEO, in sharing on the strategic outlook of the group, outlined, “The JMMB Group has the financial foundation to withstand this new economic reality, with a 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’.”
Duncan added: “Our teams will remain focused on continuously optimising key processes, systematically improving the ease of doing business with the Group, and normalizing the use of technology and digital channels to drive client and team member contact and engagement.”
As such, JMMB Group has sought to enhance its online transaction platform, JMMB Moneyline, including introducing beta-testing of its real-time stock trading feature, among other add-ons.
“We remain hopeful and confident in the sustainability of the group and expect to continue seeing realised 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,” said Duncan.