JMMB profits dip 14 per cent in second quarter

Business

JMMB profits dip 14 per cent in second quarter

Wednesday, November 18, 2020

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Regional financial conglomerate JMMB Group for its six-month period ended September 30 reported net profits of $2.42 billion— a 14 per cent decline when compared to that of the corresponding period in the prior year.

The group attributed the decline in its profitability to the economic slowdown and uncertainty in the market brought on by the novel coronavirus (COVID-19) pandemic which continues to negatively impact businesses. Despite this downturn in profit for a second-consecutive quarter, JMMB said that it remains a solid financial entity.

Chief financial officer (CFO) Patrick Ellis, in reiterating the company's financial position, said that “core earnings remains positive, as evidenced by an eight per cent growth in the company's net interest income, totalling $4.9 billion, as a result of the solid growth in the group's loan and investment portfolios,” noting this as one which demonstrates the confidence and value derived by clients, from the financial solutions offered by the company.

During the reporting period, earnings from fees and commission income also saw a marginal decline of five per cent to $1.5 billion, as lower business activity was partially offset by significant growth in managed funds and collective investment schemes across the group. While gains on securities traded and foreign exchange earnings showed a corresponding 19 per cent and 30 per cent decrease, totalling $3.2 billion and $1.1 billion, respectively.

“This decline in earnings from these revenue streams were largely attributed to the downturn seen in trading activities as the market reacted to the uncertainties brought on by the COVID-19 pandemic and slowdown in economic activities, regionally and globally,” JMMB said in a recent release.

The group for the period also incurred a $106.9 million share of losses from its 22.5 per cent stake in Sagicor Financial Corporation Limited (SFC), which was also adversely impacted by the pandemic after experiencing higher credit losses (ECLs) and adverse change in the actuarial adjustments. The group CFO in underscoring the long-term value of the investment, however noted the investment as part of the company's strategic direction to grow through inorganic means.

The company like many others in scaling operational expenses recorded a 3 per cent or $246.2 million decline for the period ended. This, it said, was in line with the reduction in business activities and cost containment strategies being implemented to drive efficiency.

Maintaining a positive outlook, group Chief Executive Officer (CEO) Keith Duncan said that the company's performance to date remains credible despite the challenging economic environment and expressed optimism for the way forward. He cited the recent credit rating by the regional entity CariCRIS, which said that the group's financial performance despite the negative effects of the pandemic will continue to be good over the next 12-15 months, as a positive affirmation of JMMB's performance and strategy.

“We are looking to augment our organic growth by realising acquisition opportunities as we expand into new markets in the short term, in addition to extending our banking products and services. Our investment business line continues to deliver robust results, as we build out our solution offerings across the group, through our integrated financial partnership approach. We will, therefore, take advantage of opportunities to raise capital to position ourselves for this future growth, in line with our strategic objectives,” Duncan said.

The group further said that it remained focus on pursuing growth opportunities during the pandemic, expecting to realise efficiency gains from the use of its digital channels. For the period ended the company's asset base grew to $466.8 billion up 17 per cent relative to the start of the year and a 24 per cent uptick in shareholders' equity which totalled $51.1 billion.


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