JMMB’s Trinidad and Tobago segment played a key role in propping up the performance of JMMB Group’s investment and equities trading business line as high interest rates weighed heavily on activities in Jamaica and the Dominican Republic.

The segment led with a contribution of 23 per cent to the group’s operating revenue, reflecting a 15 per cent growth over the previous period.

“Trinidad has done well year-over-year, and also their banking business line and their investment business line continue to grow because the central bank… has not moved aggressively with interest rates,” JMMB Group CEO Keith Duncan stated in his overview of the group’s performance during a virtual investor briefing on Wednesday.

He explained the difference with that segment and its counterparts was the actions taken by central banks in Jamaica and the Dominican Republic.

“What we have seen is central bank, especially in Jamaica and the Dominican Republic… being impacted significantly by a prolonged period of interest rate hikes over the period of a year — in Jamaica moving up 650 basis points to 7.0 per cent and in the Dominican Republic moving up by 350 basis points to about 8.0 per cent. That creates a very challenging environment and within that environment we’ve been able to achieve reasonable results,” he said.

“[In] Trinidad, their central bank has held their interest rate stable but there were some tightening in the liquidity conditions in Trinidad,” he explained.

As a result of the actions, while interest rates rose, “your cost of funds increase — deposits, repurchase agreements and other funding costs — actually adjust as the central banks move their rates. Therefore, your yields and your assets would not adjust as quickly as cost of funds and what that leads to is declining spreads and margins,” Duncan added.

For the nine months ending December 31, 2023, JMMB Group Limited posted net profit after tax of $4.76 billion from total operating revenue of $18.9 billion. Net profit for the period under review declined by 46 per cent year-on-year, while operating revenue fell by 16 per cent when compared to the same period a year earlier.

Notwithstanding, the financial group’s commercial bank business lines delivered strong growth across all segments, noting that this was due to group’s geographic and business line diversification as part of its “smart growth strategy”.

The Sagicor Financial Corporation delivered 45 per cent of profits.

As the JMMB Group “look[s] to other business lines to bolster our revenue streams”, it also saw improved performance from its capital markets, managed funds and cambio operations in Jamaica, Trinidad and the Dominican Republic.