THE Financial Services Commission (FSC) this week released 2021 full year data on brokerages, showing that the island’s security dealers combined total funds under management (FUM) was approximately $1.57 trillion as at December 31, 2021, representing 2.4 per cent increase over the previous quarter and a 14.1 per cent increase in FUM compared to the year prior, December 2020.

Full year data released by the FSC on May 10 also showed a $1.1 billion or 8.3 per cent year over year increase in aggregate total revenues (comprising interest income and other income) reported for December 2021. This uptick was due to an increase in non-interest income (fees and commissions as well as trading gains), the FSC outlined.

For the quarter ended December 2021, there were 47 registered intermediaries operating in Jamaica as at December 31, 2021. Of the 47 regulated intermediaries, the FSC analysis concentrates on 29 securities dealers whose primary business activity is dealing in securities.

For these dealers, the aggregate total balance sheet assets as at December 31, 2021 stood at $837.0 billion, a 2.4 per cent increase when compared to the previous quarter where assets amounted to $817 billion. A year-over-year comparison shows an improvement of 13.5 per cent where total assets grew from $736.9 billion as at December 31, 2020.

Cut in capital

The combined balance sheet capital as at the end of December 2021 stood at $145.2 billion, a decline of four per cent from the $148.9 billion reported for the previous quarter. On a year-over-year (y-o-y) basis, there was a 11.6 per cent increase in the total balance sheet capital for the 29 securities dealers.

The FSC said that, consequently, the capital to risk weighted asset ratio (CAR) and capital to total assets ratio (CTA) improved by 50 basis points and fell by 80 basis points, respectively, from the June 2021 quarter.

When compared to the corresponding period of last year, the CAR increased by 220 basis points while the CTA decreased by 30 basis points.

Profitability

The FSC, in assessing year end performance, noted that cumulated non-interest income accounted for 58.9 per cent of total revenue for the December 2021 quarter. Total expenses for the 29 dealers grew sharply by $2.5 billion or 22.9 per cent quarter over quarter; it increased by $3.4 billion or 34 per cent when compared to the corresponding period of 2020.

Nonetheless, the 29 securities dealers reported an accumulated net profit of $3.5 billion for the December 2021 quarter reflecting a $4.7 billion increase quarter over quarter but a $700 million decline over the December 2020 levels.

The result was a return on equity of 2.3 per cent for the quarter ended December 2021 compared to 3.2 per cent for the corresponding period last year and a -0.8 per cent for the September 2021 quarter.