JMMB to enter Central America

STEVEN JACKSON Business reporter jacksons@jamaicaobserver.com

Sunday, September 21, 2014

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JAMAICA Money Market Brokers Limited (JMMB) aims to enter Central America, according to its Dominican Republic (DR) operations.


JMMB currently operates in Jamaica, Trinidad and Tobago (T&T) and the DR.


"Our next step is to enter Central America market," said Guillermo Arancibia, country CEO in the DR, in his address to shareholders at the JMMB extraordinary general meeting (EGM) held at the Terra Nova Hotel in Kingston last Wednesday. "Individually, these countries are not that big but together they are large."


Central America consists of seven countries with a combined population of some 43 million, including Panama, Belize, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.


The DR firm offers the advantage of similar language but also an efficacious team which earned US$10.4 million in profit for its year ending 2014, up from $6.4 million a year earlier.


The growth was driven mainly by gains on securities trading as the team took advantage of market opportunities, the financials indicated.


Arancibia described the DR operations as the number one-ranked, in terms of net profits, out of 17 brokerage firms in DR with the highest funds under management and the highest return on equity at 64.8 per cent.


"We have a beautiful business model. What's our secret? It's our team. It's our people," he told shareholders. "And it's part of the mission of love and passion."


Arancibia gave no timeline but his statements are in line with JMMB CEO Keith Duncan, who reportedly mulled entering into the Central American market at the 2011 annual general meeting. However, the approach was never disclosed. It now appears that the DR operations will facilitate the branch-out.


The operations in DR contributed $104 million for the first quarter 2014/15, according to notes distributed at the EGM.


The T&T results are also positive with the half-year results "equal to or better" than the full fiscal results last year, according to Krishna Boodhai, CEO for JMMB operations in T&T, presently branded IBL Bank, which earned TT$6.5 million in financial year 2014. The bank's operations will eventually rebrand as JMMB in that territory, Boodhai indicated.


The JMMB group earned J$578 million in net profit for its June first-quarter 2014 or 30 per cent less than year- earlier levels. JMMB capital stands at $18.6 billion in March 2014 up from $17.2 billion a year earlier.


Shareholders voted unanimously to approve grouping all the JMMB subsidiaries under a new parent company -- JMMB Group Ltd -- in compliance with pending regulations.


The goal was to achieve more complete supervision under the Bank of Jamaica (BOJ).


It follows the acquisition of a deposit-taking institution, Capital & Credit Financial Group (CCFG), in 2012. Under the Banking Services Act 2014, financial groups which contain deposit-taking institutions have to be headed by a financial holding company.


The EGM was well- supported by shareholders who remained from it commenced at 11.20 am to its 2.45 pm conclusion.


In 2012, JMMB acquired the issued share capital of CCFG at a price of $4.55 per share, of which 70 per cent is to be paid in cash, which amounts to a total payout of $2.95 billion.


The remaining 30 per cent was in a share swap, paid for in the form of new JMMB shares being issued to CCFG shareholders.



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