Sagicor is reporting that it is now the second-largest conglomerate on the Jamaica Stock Exchange, measured in terms of profitability.

The feat was achieved at the end of its 2018 financial year, which was a bumper one for the multi-line financial services group whose operations span banking, insurance, investment, real estate and pension. The management team declared that they intend to hold firm on this number two spot.

The group had a good year in 2018, raising stockholders’ value by generating reasonable growth with strong returns. The growth trend continued with improved financial results for the 19th-consecutive year.

Net profit for the year was $14.23 billion, which is 18 per cent above 2017. This earning performance was driven primarily by strong business growth across all lines and favourable investment returns.

Details of the group’s 2018 financial performance were outlined to shareholders at its annual general meeting on Monday last, held at the Sagicor Group Jamaica Auditorium, R Danny Williams Building, Barbados Avenue, New Kingston.

This performance was positively driven primarily by strong portfolio growth across all business lines, efficiency and experience gains in insurance, favourable insurance benefits, experience and gains from the consolidation of Sagicor X Fund.

At the same time some factors dampened the results, including the volatility of the Jamaican dollar, lower yields on investment securities and declining re-investment rates, certain unexpected expenses, and high-impairment losses on certain bonds, especially in banking.

Shareholders were told that the return on average equity for the group was 20 per cent. Dividends per share paid in 2018 amounted to $1.20, down six per cent on the 2017 amount of $1.28. Revenues were one per cent ahead of prior year, reaching $70.66 billion.

Earnings per share (EPS) was $3.65, 17 per cent better than 2017. Rising confidence in the economy, combined with this favourable EPS performance, improved the price per share from $38.05 at December 31, 2017 to $39.80 at December 31, 2018, and market capitlisation up from $148.61 billion to $155.44 billion — an increase of five per cent.

The group’s subsidiaries had strong capital adequacy, which was well above the regulatory stipulation as measured by the Minimum Continuing Capital and Surplus Requirement (MCCRS), that requires licensed entities to maintain adequate capital or to maintain an adequate margin of assets over liabilities.

For Sagicor Life Jamaica, the life insurance subsidiary’s MCCSR was 183.8 per cent (150 per cent regulated minimum). Sagicor Investments Jamaica and Sagicor Bank Jamaica were 13.9 per cent, and 15.2 per cent respectively (10 per cent regulated minimum).

Total Group assets expanded by 12 per cent during 2018. At December 2018 assets were $394.13 billion, up from $352.04 billion as at December 2017. Assets grew by normal business growth, consolidation of Sagicor X Fund from October 1st, 2018, and the acquisition of Travel Cash Jamaica Limited from December 1, 2018.

The annualised return on assets of the group was 3.7 per cent, compared to 3.5 per cent for 2017.

Total assets under management, as at December 2018, including group assets on balance sheet, pension funds assets managed on behalf of clients, and Sagicor Sigma Global Funds (unit trusts) and other managed funds were $763.67 billion, representing a 12% increase over the December 2017 amount of $679.82 billion.

Group-consolidated revenue for the year of $70.66 billion was slightly ahead of last year, after reflecting investments-related credit and impairment losses in 2018 and contributions from a large, new single premium annuity in 2017. Net premium income of $39.81 billion, which accounts for 56 per cent of revenue, was three per cent lower than in 2017, which benefited from a large, single-premium annuity.

Net investment income of $15.75 billion, before capital gains and losses, was 1% better than last year despite interest rates trending down in Jamaica.