Thursday 9 April, 2020

JMMB seeks out more business opportunities as profit grows by 33%

JMMB Group plans to delve deeper into its inorganic growth strategy for the fourth quarter of its 2019/2020 financial year, having completed the acquisition of a 22.5 per cent interest in Sagicor Financial Company.

JMMB’s focus on “accretive business development opportunities” to grow return on equity while expanding its footprint, is just one of three targets the financial group has before closing out what it says will be its strongest financial year in history.

Net profit for JMMB’s nine-month period ending December 31, grew 33 per cent to $4 billion, which the financial group said was largely attributable to organic and inorganic growth through acquisition.

“Our fourth quarter will see a sharp focus on embedding our financial partnership model to better serve our clients and reap synergy benefits from operating from a ‘One Group, One Client, One Experience’ framework,” JMMB said.

It also listed completing crucial operational efficiency projects as another objective for the quarter, which will allow its banking business lines to operate on one core banking system whilst utilizing standardized products, procedures and policies across the group.

JMMB’s successful execution of the acquisition of 22.5 per cent interest in Sagicor Financial, allows the Group diversification and the opportunity to participate in the future growth of a market leader in the Caribbean’s insurance, pension and asset management sectors.

The financial group expects to show its share of net assets and share of profits or gains arising on this acquisition before the end of its 2019/2020 financial year or March 31, 2020. The deal was approximated at $34.4 billion.

“This significant acquisition is measured at cost as the fair value measurement of the identifiable assets and liabilities acquired was not completed at the reporting date. The financial results of SFC as at December 31, 2019, are also not yet available,” the company told shareholders in its juts released nine months results.

JMMB Group ended the nine-month period with net operating revenue of $17.38 billion, reflecting year on year growth of 26 per cent or $3.61 billion. The growth in operating revenue was mainly attributable to increases in net gains on securities trading, FX trading gains, fees and commission income and net interest income.

“Net gains on securities trading grew by 69 per cent to J$5.64 billion and was partly due to improved appetite for emerging-market assets. Additionally, there was a tender offer by the Government of Jamaica for global bonds maturing in 2022, 2025 and 2028 bonds. This offer was oversubscribed and subsequently, global bonds maturing in 2045 were re-opened and an additional US$815 million issued,” the company said.

Foreign exchange trading gains of the financial group increased by 19 per cent or $359.28 million to $2.26 billion from increased trading volume and growth in regional markets, according to JMMB.

Fes and commission income was 32 per cent higher at $2.43 billion and was due to significant growth in managed funds and collective investment schemes across the Group, while net interest income grew by 5 per cent to $7.02 billion reflecting strong growth in the loan and investment portfolios.

At the end of the reporting period, the JMMB Group’s asset base totalled $413 billion, up $99.96 billion or 29 per cent relative to the start of the financial year. This was mainly on account of a larger loan and investment portfolio as well as investments in associated company Sagicor Financial.

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