Business

JMMB profit jumps 49%

BY SHAMILLE SCOTT Business reporter scotts@jamaicaobserver.com

Wednesday, February 13, 2013    

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THE Jamaica Money Market Brokers (JMMB) Group reported a 49 per cent increase in net profit.

For the three months to December 2012, the group made $641 million in profit compared to $428 million during the comparative period in 2011.

"The group's core business line has driven our positive performance," said Patrick Ellis, chief financial officer of the JMMB group.

Its net interest income (NII) and growth in its portfolio were also influential, he said.

The results show that the group made $330 million more in NII, from $965 million during the three months to December 31, 2011, to $1.3 billion during the review period.

JMMB group also took advantage of the gains on securities trading, which was 47 per cent higher, or $153 million more than the $325 million it made in the same quarter in 2011.

Foreign exchange margins from cambio significantly increased by $69 million to $105 million.

"With the devaluation of the dollar, there was a high demand for foreign exchange," Ellis said.

Overall, the group's revenue increased.

But the company also saw a significant increase in expenses.

JMMB incurred $1.1 billion in operating expenses during the three months to December 31, 2012, compared to $839 million a year earlier.

This was brought on by the integration expense of Capital and Credit Financial Group (CCFG) to the JMMB group.

The company acquired CCFG last year, delving into the unit trust market.

"We paid incentives to staff and growth in the region contributed to the expenses," Ellis added.

Though JMMB had additional expenses as a result of a branch that was added in the Dominican Republic capital, Santo Domingo, Ellis said that subsidiary contributed to the company profit.

"We would have seen the DR operation being extremely profitable in our year-to-date results," he said.

Keith Duncan, the group's chief executive officer, said: "The DR has a strong sovereign credit and has been extremely positive, and has impacted our profit."

The regional diversification has borne fruit for JMMB, Duncan said.

Meanwhile, in Trinidad and Tobago, where JMMB group owns 50 per cent shares in IBL Banking Group, JMMB is seeing results of the associated company, Ellis said.

The principal activities of the company are securities brokering, securities trading, merchant banking, dealing in money market instruments, operating a foreign exchange cambio and managing funds on behalf of clients.

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