JAMAICA National Building Society’s (JN’s) losses to debt exchange over the last three years will hit $2.5 billion.

And that doesn’t include “$2.3 billion of withholding tax owed by the Government from the previous debt exchange”, according to JN general Manager Earl Jarrett.

“The NDX is going to cost Jamaica National a lot of money, it will result in an immediate loss of some $1.2 billion,” he said while speaking at a members briefing yesterday.

The NDX’s predecessor, the Jamaica Debt Exchange (JDX) of 2010, cost the building society $1.3 billion.

“As a holder of substantial amounts of government bonds, financial institutions such as Jamaica National will receive significantly less interest than contracted on our investments,” the general manager said. “Because interest payments represent a significant portion of expenses for financial institutions, this will translate into a lowering of interest rates on savings.”

What’s more, the debt exchange will also have severe implications for JN’s pension fund.

Annual interest income is projected to decline by US$15,000 on US-dollar portfolio; by $33 million on the fixed rate, Jamaican portfolio; and $3.3 million on variable rate, Jamaican dollar portfolio.

As trustee for funds for more than 700,000 persons, the building society hesitated before agreeing to the participate in the NDX.

“As a people, we have a collective responsibility to hold those responsible, to deliver on promises that are made,” said Jarrett. “In the past, we needed to have been far more vigilant; we needed to have understood what we were getting into.”

Now, he is somewhat more optimistic.

“Already we have seen some indications of this with the establishment of a watchdog committee to ensure that the commitments made, not just to the International Monetary Fund, but more so to the people of Jamaica, are honoured, so that at the next point when the Jamaican debts have to be repaid, we are not faced again with a debt exchange,” the building society head said.

Nevertheless, Jarrett expressed anger at the present state of the economic environment.

“I am not happy about the fact that the conversations I hear speak about 2017, 2020, 2030 of low growth,” he said. “And, I worry for the children of today, the children born today, knowing that they will live in desperate hope of making Jamaica, “the place of choice, to live, work, raise families and do business”.”