NCB Capital Markets on Friday purchased a 29 per cent stake in Jamaica Money Market Brokers (JMMB), making it the largest single shareholder in the financial institution.

The news broke as JMMB reported robust first-quarter profits of $950.6 million, at the same time the company is said to be on the brink of announcing a major acquisition of a local financial house.

“This is a clear indication that NCB sees JMMB shares as excellent value with growth potential,” stated JMMB Group CEO Keith Duncan in a press release.

NCB has indicated to the regional stock exchanges that the investment is in line with its wealth management arm’s investment management strategy of taking positions in liquid financial assets and does not represent a move to take control of or acquire a majority stake in JMMB.

NCB Capital Markets grabbed close to 429 million shares of the stock, which closed at $7.15 on Friday. Given the total percentage shareholding, JMMB will be treated as an associated company of NCB Capital Market per international accounting standards, said JMMB’s chief financial officer Patrick Ellis.

“This categorization is a normal course of financial accounting applied when a company buys shares between 20 per cent and 50 per cent of an entity — it’s an investment, and has no impact on the management or strategic direction of the company in which they have invested,” said Ellis.

JMMB’s net profit for the period ended June 30, 2011 increased by 437.5 per cent over the corresponding period last year. This was boosted by a 50.6 per cent increase in net income to $725.4 million and a 375.4 per cent rise in other operating revenues, namely gains on securities trading.

What’s more is that, on the other hand, JMMB’s efficiency ratio (administrative costs as a percentage of operating revenue) improved to 38.1 per cent from 69.4 per cent when compared to the corresponding period last year. Operating expenses increased by 22.1 per cent to $637.6 million compared to $522.2 million over the comparative period in 2010. The firm said this increase was mainly attributable to growth in subsidiaries in the regional markets, inflationary increases granted to staff at the start of the financial year and incentives accruing to staff as a result of the Group’s performance.

“We continue to focus on actively seeking and seizing market opportunities, building core revenues across diversified business lines locally and through our regional territories in order to drive long term sustainable growth and further enhance shareholder value,” said Duncan, further stating that “This is in tandem with our commitment to continue to enhance client intimacy by providing relevant financial solutions to our extensive client base of over 160,000, delivered with JMMB style of exceptional client care.”

NCB is said to have purchased shares which belonged to the troubled CL Financial, allowing JMMB to diversify out of the troubled Trinadian entity which once had a 40 per cent stake in the company.

Meanwhile, Sunday Finance has garnered information from highly reliable sources that, subject to regulatory approval, JMMB will announce a major acquisition as early as this week. Sources stated that it will be a local financial house.

Capital and Credit Financial Group (CCFG) has for months been the subject of speculation that it is on the hunt for a buyer. CCFG head Ryland Campbell said in response to an article in June that “on a timely basis, should there be a specific business proposition which requires the Board of Directors of CCFG to make a disclosure, then such disclosure will be made to the Regulators and the general public as may be prudent and in compliance with our business conduct”.

When Sunday Finance contacted CCFG senior vice-president Michelle Wilson-Reynolds on Friday, she refused to confirm or deny whether JMMB had acquired the institution.

“I have no update to give as far as confirmation or denial is concerned… the chairman’s statement stands as that is concerned,” she said.

JMMB has said that it plans to continue its regional expansion and vision of becoming a fully integrated financial services organization that is banking and investments.