Fri | Jan 19, 2018

JMMB scores big on securities trading

Published:Friday | November 18, 2016 | 12:00 AM

JMMB Group earned $1.4 billion in net profit for its September second quarter or 135 per cent more than a year earlier due to a massive gain on securities trading. Profit in the September 2015 quarter totalled $607 million.

"Trading activity increased in the second quarter on account of bullish sentiments on emerging market assets, given the outlook for Fed rates as well as negative interest rates in Europe arising from Brexit," JMMB said.

"In August, there was a tender offer by the Government of Jamaica for its 2017 and 2019 Global bonds which was favourable for our portfolios. Following the tender offer, market liquidity increased which resulted in higher levels of trading."

JMMB Group, whose businesses span Jamaica, Trinidad & Tobago and Dominican Republic, reported that net revenue hit $4.27 billion for the quarter compared with $2.75 billion a year earlier.

Over six months, the group earned $2.03 billion in net profit, or $1.24 per share, compared with $0.72 per share a year earlier.

Net operating revenue rose 31 per cent to $7.7 billion over the same period. It resulted from growth in all business lines, namely securities trading, interest income, fee and commission income, and foreign exchange trading. Gains on securities trading grew by 52 per cent or J$1.1 billion to J$3.19 billion.

"Net operating revenue grew substantially in all the territories. However, due to increased trading activities in Jamaica, a smaller proportion of revenue was generated outside of Jamaica in this period," said the Keith Duncan-led company.

In Trinidad, revenue was up 17 per cent "on account of the core banking business", and the 19 per cent in Dominican Republic "reflected in part the growth of our asset management and mutual funds business lines," stated the group.

JMMB Group operates a boutique commercial banking outfit in Trinidad. It is also making plans to transform its merchant banking unit in Jamaica to a commercial banking operation, having recently received approval on its banking licence application - a plan that "reinforces our drive to offer our clients a full suite of financial solutions, as well as our strategy to diversify our revenues both regionally and through our various business lines," the company said.