JMB tackles bad debt ahead of its divestment


JMB tackles bad debt ahead of its divestment

Reduced surplus projected for this year

Observer business writer

Friday, March 06, 2020

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The Jamaica Mortgage Bank (JMB) plans to make a serious dent in its bad-debt portfolio ahead of its divestment later this year.

The extent of the JMB's bad-debt portfolio is not known but what the Jamaica Observer can confirm is that its loan losses for 2018/2019 amounted to just over $18-million. There is no reporting on the loan losses for the current 2019/2020 fiscal year, which ends on March 31st and the upcoming 2020/2021 fiscal year, according to the recently tabled Jamaica Public Bodies Estimates of Revenue and Expenditure for the Year Ending March 2021

The JMB, which was established on June 1971 as a private limited company and then converted to a statutory corporation in June 1973, is charged with the responsibility of promoting environmentally acceptable residential housing solutions and economic growth in Jamaica.

The bank also mobilises loan funds for on-lending to public and private sector housing developers and to other lending institutions in addition to providing mortgage insurance services on behalf of the Government of Jamaica.

The JMB reports that it will seek to reduce its bad-debt portfolio by “closely monitoring performance of new loans and continue to pursue the implementation of immediate strategies to dispose of and recover bad debts.” As part of its strategic plan for the upcoming financial year, JMB plans to drive growth of Mortgage Indemnity Insurance by adding at least one new mortgage- granting institution to the number of approved lenders.

The bank is projecting that it will issue 120 new mortgage indemnity insurance undertakings at a value of $144 million per annum. The projections include increased income from non-traditional sources such as technical and project management services.

The management of the bank reports that plans to facilitate the divestment of the JMB will continue during the budget year. Notwithstanding these plans, JMB will through the mobilisation of financial resources, continue to contribute to the overall growth in the supply of housing solutions.

“Accordingly, securing low-cost funding for on-lending in the primary mortgage market to increase the bank's support in fulfilling the country's housing demand will remain of primary focus during the budget year,” the JMB reported in its summary for the Jamaica Public Bodies Estimates of Revenue and Expenditure for the Year Ending March 2021.

The bank projects a reduced surplus in the upcoming financial year. A surplus before tax of $104.94 million is projected, down from the current surplus estimated for 2019/2020 of $207.23 million. JMB will maintain its staff complement of 24 during the 2020/2021 fiscal year.

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