The continuation of adverse macroeconomic conditions has affected profits for JMMB Group during its six-month period ended September.

At the end of the half-year mark, the regionally integrated financial services provider achieved $3.63 billion in net profit — down from the $5.5 billion in record profits the company delivered “under more normalised market conditions in the previous financial year”. Additionally, the group posted net operating revenues of $12.4 billion, representing an eight per cent decline when compared to the prior year.

Profit for the second quarter also fell $1.6 billion, more than halving the $3.6 billion earned during the same quarter of 2021.

Patrick Ellis, JMMB’s chief financial officer, said that despite the fallout, the group’s performance remains commendable despite the tight macroeconomic environment — one characterised by rising inflation, persistent geopolitical uncertainties; supply chain disruptions, increasing interest rates and the resulting reduction of liquidity in the market.

“As regulators continue to increase domestic interest rates to combat inflation, local bond prices in Jamaica and the Dominican Republic have been significantly impacted and interest rate spreads reduced.

“The group’s financial results reflect the impact of this environment, as evidenced by a 34 per cent dip in net profit, year-on-year, as well as a fall-off in earnings from gains on securities trading [GOST] and net interest income [NII] which, when combined, account for 61 per cent of total revenue,” he said.

A slower rate of interest rate hikes by the central bank in Trinidad, due to improved performance in its economic recovery, saw that business line contributing approximately 21 per cent of the group’s total revenue.

“We are looking to tap the Trinidad and Tobago market, to leverage more opportunities as the operating environment is currently more accommodative to growth, even as we actively explore and further capitalise on opportunities for future growth through acquisitions across the region,” the company noted.

At the end of the six-month period, the JMMB Group’s asset base stood at $637.8 billion, up four per cent relative to the start of the financial year.

“This was driven by the 13 per cent growth in the loan portfolio, totalling $161.45 billion, even as the company maintains a solid credit quality in line with international standards and mitigates against possible deterioration in credit quality. Growth in the asset base over the six-month period was funded in part by increases in customer deposits, repos and multilateral funding,” a summary of its latest financial performance noted.

JMMB Group CEO Keith Duncan continues to maintain a stable financial outlook and said that despite the challenges, the business will continue to build out its regional diversification strategy and roll out new solutions as it moves to leverage growth across it various portfolios locally and in Trinidad and the Dominican Republic.

“The group has continued to successfully implement strategies to diversify and maximise revenue via its ‘smart growth’ initiatives whilst navigating the current challenging operating environment. Recognising this, regional and international entities continued to demonstrate their confidence around the group’s performance and strategy,” Duncan said.