THE JMMB Group's growth trajectory continued in earnest with the year to date results more than doubling, surpassing the previous financial year's performance.

This positive performance for the combined three quarters ended December 2021 came about despite the lingering uncertainty and operational challenges brought on by the pandemic. The group posted net profit of $8.82 billion, up 119 per cent and earnings per share of $4.23 for the nine months ended December 31, 2021.

Group CEO Keith Duncan remarked that, “the strength of this performance again underscores the efficacy of the group's maintained focus on growing core revenue, diversification, and building out digital services, solutions and channels to improve client experience and efficiency.” Jamaica contributed 57 per cent to the group's net profit performance while the Dominican Republic and Trinidad and Tobago operations contributed 32 per cent and 11 per cent, respectively.

Banking operations in the Dominican Republic were brought on to the group's core banking platform bringing all three operating territories on to the same platform, a significant milestone in the group's standardisation programme. Duncan explains that, “efficiencies in processing and reporting as well as enhanced solutions are expected to result from this.”

The JMMB Group CEO discloses that “new projects in support of the group's business line diversification strategy will kick off in this current final quarter including a new system to improve loan processing as well as a new card solution aimed at widening clients' payment options.” He advises shareholders that the group will be completing its 2021/2022 financial year strongly focused on growth, highlighting that “growth will continue particularly as we explore value-creating acquisitions and initiatives in the region.“

He points out that, “the regional integrated financial services business model that JMMB is building out continues in earnest and we expect to close the year strong maximising value for all our stakeholders.” The just ended December quarter saw a continuation of the group's digital imperatives with the completion of upgrades of all ATMs to Smart ATMs in Jamaica and the commencement of upgrades in Trinidad and Tobago.

These upgrades are central to JMMB's focus on delivering new banking solutions aimed at improving client access and complementing 'No Fee' solutions such as the Ez Access and Ez Start chequing accounts in Jamaica. Turning to other financial highlights during the nine-month period, net operating revenue grew to $21.98 billion, up $5.44 billion or 33 per cent.

All the revenue lines increased, especially net interest income, trading gains and fees and commission income. This was facilitated by increased economic activity relative to the prior period as well as accommodative monetary policies for most of the period.

Strong growth in the loan and investment portfolios

Further, our clients continue to demonstrate confidence in the value of solutions and services which was evidenced by strong growth in the loan and investment portfolios. Thus, net interest income moved from $7.58 billion to $8.98 billion.

Trading gains grew by 45 per cent to $7.15 billion due to improved market activity. Fees and commission income was 58 per cent higher at $3.73 billion and reflected increased economic activity as well as significant growth in managed funds and collective investment schemes across the group.

The banking & related services segment contributed $8.11 billion or 37 per cent of net operating revenue. This represented a 24 per cent increase when compared to the prior period and was largely on account of strong growth in the loan book which translated into increased net interest income.

The financial and related services segment contributed $13.69 billion or 62 per cent of net operating revenue and reflected an increase of 40 per cent. This was buoyed by increased trading activity and other business activities as well as increased client funds under management.

JMMB has not recorded any share of profits from its associated company Sagicor Financial Company Limited (SFC). SFC has opted to publish its audited results for the year ended 31 December 2021, utilising 90-day provision under the Toronto Stock Exchange. Hence, the results for the December quarter was not available.

The group will therefore, reflect any earnings from SFC in its fourth quarter ended March 31 2022.

Short-term cost-containment measures

Operating expenses moved from $10.66 billion to $13.24 billion as for a part of the prior period it implemented short-term cost containment measures to dampen the effect of the pandemic. Since then, the group has pivoted to growth mode and this is reflected in its costs.

Nevertheless, the operational efficiency improved from 64 per cent to 60 per cent and it will continue to focus on projects to cause scale and efficiency and thereby contribute to long-term shareholder value.

At the end of the reporting period, the JMMB Group's asset base totalled $609 billion, up $95.3 billion or 19 per cent relative to the start of the financial year. This was mainly on account of a larger loan and investment portfolio.

The investment portfolio grew by 23 per cent to $327.86 billion, while loans and notes receivable increased by 15 per cent to $137.74 billion. The credit quality of the loan portfolio continued to be comparable to international standards and JMMB continue to maintain enhanced monitoring to mitigate against possible deterioration in credit quality.

Growth in the asset base over the nine-month period was funded by increases in customer deposits and repos. Customer deposits increased by $22.15 billion or 17 per cent to $150.46 billion, while repos grew by $52.33 billion or 23 per cent to $280.06 billion.