JAMAICA National Building Society (JNBS) says it has been forced to implement “significant cost-saving measures” due to the $1.5 billion hit it took from the National Debt Exchange (NDX), but did not state clearly whether the plan includes job cuts.

JNBS, the largest building society in Jamaica, and companies in the wider JN Group have been negatively impacted by the NDX, under which investors in government bonds have agreed to take a cut in interest rates.

Caribbean Business Report sources informed the newspaper this week that JNBS would implement a major job-cutting exercise against the background of the resulting reduction in revenues. The JN Group has a staff complement of over 1,000 employees.

In response to queries from the newspaper, JNBS general manager Earl Jarrett acknowledged that the firm was implementing significant cost-saving measures but did not state explicitly that this included job cuts.

However, he said that the NDX “has reinforced the shift to greater use of ATM cards, self-serve kiosks, strengthening of online banking and drop-box systems”. He pointed out that not all members are comfortable with these initiatives, but the changes are essential for survival in the current environment.

“We were faced with difficult decisions regarding our locations in Annotto Bay and Gayle, whose operations we had to justify,” Jarrett said.

“At meetings early in April, however, we received strong representations from our members in those communities that they wanted these locations to remain open,” he added.

A decision was subsequently taken to keep the locations open on an adjusted weekly schedule for a trial period, he said, noting that “the feedback from members about this compromise has so far been most positive.”

As a holder of substantial amounts of government bonds, financial institutions such as Jamaica National will receive significantly less interest than contracted on investments. The firm announced last month that the NDX would cost the company $1.5 billion, bringing to $2.5 billion its losses to debt exchanges over the last three years. The NDX’s predecessor, the Jamaica Debt Exchange (JDX) in 2010, cost the building society $1.3 billion.

“As the trustee of funds of our more than 700,000 members, we have responded prudently to the government measures,” Jarrett said.

“We are reshaping our organisation to take advantage of productivity initiatives that have been implemented over the past few years, so that we can function effectively in the new economic environment,” he added.

Jamaica National is a mutually owned organisation, thus the first response was to review the implications with its membership, Jarrett said. He pointed out that the company started a process of consultations in four regional meetings during March that involved members across the island, in the United Kingdom, the United States and Canada.

“We have a very active membership and they let their voices be heard,” he said said. “Their response has had a direct impact on the decisions we have been implementing.”

The biggest push has been the reinforced focus on improving operations through use of more efficient internal processes and improved technology to facilitate transactions, he declared.