JMMB enters Dom Rep pension market, 3Q profit falls 33%
JMMB Group reported flat revenues which translated to $522 million net profit in the December 2015 third-quarter, or one-third lower profit than the $790 million earned a year earlier.
Net interest revenue for the group totalled $1.45 billion over the three months compared to $1.39 billion a year earlier.
Despite the fall in profits for the quarter, JMMB continues to pursue its strategy of growing revenues outside of Jamaica. Most recently it entered the pension market in Dominican Republic.
"The group continues to focus on its strategic initiatives of regional diversification while integrating new entities and building core revenues," stated chairman Noel Lyon and chief executive officer Keith Duncan in a notice prefacing the financial report.
Net profit was also down for JMMB over nine months ending December 2015 at $1.73 billion compared to $1.86 billion a year earlier.
"The result for the period was impacted by the change in accounting for asset tax expense imposed by the Government of Jamaica. Consequently, asset tax of $397.5 million was fully recognised in April 2015, the first quarter; and the prior period results were restated to conform with the new requirements," according to both directors.
Nine-month operating revenues showed positive growth year-over-year, improving by 9.2 per cent to $8.5 billion. In particular, there were gains on securities trading, foreign exchange trading, and commission income reflected increases of 12.8 per cent, 16.4 per cent and 29.8 per cent respectively, driven largely by volume increases and exploitation of market opportunities in Jamaica.
JMMB's Merchant Bank contributed net profit of $330 million, an increase of 40 per cent over the prior period.
"The positive earnings trajectory and growth in the bank are founded on a high quality balance sheet with a 99.8 per cent performing asset ratio," said the directors, adding that the bank’s loan portfolio grew by 32.4 per cent from March 2015, with a non-performing loans ratio at a low 1.7 per cent.
Operations in the Dominican Republic also continue to produce positive results with the Puesto De Bolsa contributing net profit of $160.1 million for the period.
"The group continues to build out its full range of services in the Dominican Republic which includes money market mutual funds and the newly acquired savings and loan bank, Banco Rio de Ahorro Y Credito JMMB Bank SA," stated the directors.
In December, JMMB obtained approval from the regulatory authority to administer pension funds in the Dominican Republic.
"This is the first new licence granted in 17 years," stated the directors.
In Trinidad and Tobago, the group’s operations continued on a positive trajectory, contributing $186.9 million of profit. The company says its build out of an integrated financial services model continues in that market through JMMB Investments Trinidad & Tobago Limited and its commercial banking arm Intercommercial Bank Limited.
JMMB Group’s asset base is now estimated at $225 billion, up from $218 billion at March 2015.
"This increase in assets was mainly funded by client deposits,” said the directors.
“In addition, consistent with the group’s strategy of moving assets off balance sheet, managed funds on a non-recourse basis increased to $65.1 billion, up 60.1 per cent compared to $40.7 billion for the prior year.”