Members of First Heritage Co-operative Credit Union Limited (FHCCU) will vote next Thursday on a potential divestment of FHC Investments Limited, its broker subsidiary, which has been incurring losses since 2022.

This was revealed in the notice to the 14th annual general meeting (AGM) scheduled for September 10 virtually and at AC Hotel Marriott in New Kingston. The special resolution seeks permission to authorise the full divestment, by sale or other lawful disposition, of up to 100 per cent of FHCCU’s ownership and shares in FHC Investments.

The proposed sale of FHC Investments comes after the Jamaica Stock Exchange (JSE) admitted the securities dealer as a member-dealer/broker in July 2021. FHC had its first trade of securities in March 2022.

A quick review of the available FHCCU annual reports revealed a worsening situation at FHC Investments, showing a cumulative net loss of $120.68 million between 2022 and 2024, with a net profit of $3.63 million in 2021. The broker reported a $5.23-million net loss in 2020 and a net profit of $24.07 million in 2019.

FHCCU’s 2024 annual report highlighted that FHC’s net interest income was compressed in 2023 due to the challenging macroeconomic conditions spurred by the Russia/Ukraine war, rising inflation, interest rates, and fair value losses on stocks.

“Ongoing market challenges augmented by the disruptions faced during the 2024 cyber incident collectively impacted the organisation’s performance. Looking ahead to 2025, the focus will be on improving the subsidiary’s capabilities and processes, enhancing technology, and optimising investment strategies to gradually improve and restore its financial performance,” FHCCU’s 2024 annual report stated on its single subsidiary.

FHCCU invested $75 million directly into FHC Investments in 2021 before it became a member-dealer. In 2022 it deployed another $45 million to the subsidiary. The credit union invested another $50 million in February 2025 into the subsidiary. FHC Investments’ assets under management also moved from $4.43 billion in 2021 to $2.66 billion in 2024. It collected an estimated $51.16 million in management fees during 2024.

FHCCU’s 2024 surplus before honoraria and donations was $367.32 million at the company level, but that fell to $326.38 million on consolidation of its subsidiary. That reflects the loss being experienced at the subsidiary level.

The move to sell FHC Investments occurs following the sale of JN Fund Managers Limited (now Barita Fund Managers Limited) to Barita Investments Limited (BIL) for $3.81 billion in January 2026. JN Fund Managers is one of the 14 JSE member-dealers/brokers. BPM Financial Limited was admitted as a member-dealer in September 2025.

There has also been further compression in the number of securities dealers over the last three years as per Financial Services Commission (FSC) reports. Heritage Education Funds International (Jamaica) Limited voluntarily surrendered its securities dealer licence on July 1, more than two years after International Financial Planning Jamaica and Proven Management Limited voluntarily surrendered their licenses.

Sagicor Investments Jamaica Limited purchased the securities dealer book of business from Alliance Investment Management Limited in August 2022. There were 33 securities dealers reported as per the FSC’s March 2026 report, but just 19 firms’ primary business was in securities dealing.

Those 19 firms reported a 17 per cent rise in combined revenue to $87.77 billion for 2025 due to more trading profits on debt securities. They also reported a profit before tax of $15.26 billion compared to a loss before tax of $1.54 billion, a swing attributed to higher revenue and falling expenses. However, a decline in revenue and rising expenses saw net profit drop 47 per cent to $2.17 billion for the March 2026 period.