Jamaica National Building Society (JNBS) pumped $300 million into its brokerage house JN Fund Manager (JNFM) during the financial year ended March 31, 2010 to bolster its capital base.

In a written response to the Business Observer, JNBS said it “increased the capital in JN Fund Managers to provide greater support for its portfolio”.

In a note to its financial statements published in newpapers two weeks ago, the mortgage house said JNFM — a wholly-owned subsidiary — “issued an additinoal $300 million in ordinary shares and redeemed $7 million in preference share during the year”.

JNBS shareholdings in the subsidiary remained unchanged at 100 per cent, which meant that the transaction was a capital injection into the fund manager.

JNBS did not disaggregate its statement of revenue and expenses to show how JNFM performed last year, but the financial statements did show that surplus after tax associated with subsidiaries fell from $703 miillion in the 2009 financial yea to $172 million in 2010.

JNBS explained that this was due to “NEM Insurance Company (of which JNBS owns 99.5 per cent) had to make some special provisioning and their profits fell”.

NEM’s financial statements, which run for the 12 months to 2009, showed a decline in net profit from $548 million to $135 million.

JNBS has also been acquiring additional shares in NEM since 2008, when it paid $7.5 million for a 0.2 per cent stake in the company to bring its share of the general insurer to 99.2 per cent.

During the year under review, the group acquired an additional 0.3 per cent interest in NEM to bring its stake to 99.5 per cent.

Overall, JNBS reported increase surplus after tax from $1.14 billion in the year ended March 31, 2009 to $1.25 billion in the year under review, as operating surplus grew by $380 million and despite a $196.9 million gain being realised in 2009 from the sale of its telephone top up business, E-Pins Division.