JMMB profit up 56% for Q1


JMMB profit up 56% for Q1

Thursday, August 16, 2018

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REGIONAL financial entity JMMB Group will launch its consumer finance line of business in Trinidad and Tobago later this year as well as increase its number of automated teller machine (ATM) services in Jamaica as part of plans to drive growth.

JMMB Group, which reported growth of 56 per cent in net profit year-over-year for the three-month period ending June 30, yesterday disclosed that it is also focused on improving client experience, with particular emphasis on reducing wait time and client on-boarding time in its Financial Life Goal Centres as part of its growth strategy.

For the first quarter ended June 30, JMMB posted net profit of $956.6 million and revenue of $4.7 billion. In a press release yesterday, JMMB attributed the growth to foreign exchange trading gains, fees and commission income, net interest income, and net gains on securities trading.

JMMB's foreign exchange trading increased $277.1 million, or 117 per cent, amounting to $514.6 million as a result of increased trading activity and the faster pace of depreciation of the Jamaican dollar over the period. Fees and commission income totalled $481.6 million, an increase of 32 per cent over the corresponding prior period, driven by significant growth in managed funds and collective investment schemes across the group.

Net interest income for the reporting period stood at approximately $2.1 billion, reflecting growth of eight per cent, or $155.9 million in the Group's loan and investment portfolios. Additionally, net gains on securities traded showed a marginal increase of four per cent compared to the prior period, totalling $1.6 billion due to a decline in trading activities caused from the frequency of US Federal Reserves rate increases.

Group CEO Keith Duncan noted that the positive performance achieved by the company reflects its commitment to build-out of its integrated regional financial strategy, even as the entity has intensified the consolidation and growth phases of its business model.

“[There is] continued maximisation of strategic synergies to extract operational efficiencies from the Group's portfolio, while driving growth in our core business lines,” Duncan added.

As evidence of this focus, JMMB Group has rolled out several initiatives across its regional subsidiaries. So far the financial entity has expanded online services in the Dominican Republic; improved the online banking platform — JMMB Moneyline — with added features in Jamaica; and standardised client experience across the group with the implementation of sales training tools and other initiatives.

During the quarter, JMMB noted that costs were largely associated with the further build-out of the integrated group sales support framework and continued roll-out of commercial banking operations in Jamaica.

The initiatives resulted in increased expenditure of 11 per cent, amounting to $3.34 billion. JMMB, however, said it remains committed to managing its expenses, as evidenced by its operating efficiency ratio, which moved from 74 per cent in the prior period to 72 per cent.

Duncan highlighted his optimism towards the JMMB Bank's credible performance as the entity celebrates its first year in the commercial banking space.

“The build-out of the commercial banking operation in Jamaica is expected to reap greater synergies and operational efficiency, as the subsidiary seeks to better serve its clients and maximize shareholder value. Since making entry into the commercial banking foray, JMMB Bank (Jamaica) has expanded its footprint, upgraded its infrastructure and continues to review its client experience processes to ensure that it provides exceptional service,” he said.

Since the start of the financial year, the JMMB Group's asset base grew by eight per cent, or approximately $23 billion to $314.7 billion — as a result of higher cash holdings and larger loans and investment portfolios.

The entities across the group remain adequately capitalised, exceeding regulatory capital requirements, although the shareholder's equity decreased by nine per cent to $26.3 billion.

“I am proud of the group's performance over the first quarter, which would not have been possible without a strong and motivated team, who has worked hard in yielding positive results and remained committed to providing financial solutions, in the best interest of our clients,” the group CEO said.

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