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JN Bank grows commercial banking sector to $1.2 trillion

Published:Wednesday | February 1, 2017 | 12:00 AMTameka Gordon
Managing Director of JN Bank, Maureen Hayden-Cater, speaks at the launch of the bank on Wednesday, February 1, 2017.

JN Bank entered the market on Wednesday as the third largest of seven commercial banks, immediately growing the sector to around $1.22 trillion by assets.

Concurrently, its transition diminishes the mortgage banking sector, which now has only two players - Victoria Mutual Building Society and Scotia Jamaica Building Society - whose assets were last estimated at a combined $125 billion, according to the most recent industry data compiled by the central bank for the quarter ending September 2016.

JN Bank Limited, with assets totalling $180 billion, displaces Sagicor Bank Jamaica Limited as the No. 3 bank. Managing Director Maureen Hayden-Cater signalled immediately that JN aims to differentiate itself through affordable services for members.

Hayden-Cater opted, however, not to weigh in on the debate regarding regulation of banking fees now being played out in Parliament and in the public.

The Jamaica Bankers Association is against the move to restrict fees, but JN is not yet a member of the group, she said.

National Commercial Bank Jamaica and Scotia Group Jamaica are, respectively, the largest of Jamaica's banks, commanding 73 per cent of the loan market, according to Bank of Jamaica industry data. That ratio will shrink once JN Bank's loan portfolio is factored in the mix.

NCB alone collected more than $13 billion in fees in its 2016 financial year, from which it netted $10.9 billion after expenses. Scotia Group netted $7 billion in fees in the same period.

JBA argues that the proposed 'Mandatory Minimum Service Package' in the bill amending the Banking Services Act would effectively introduce "price-fixing". The bankers warned this week that any curtailment of their earnings from fees would likely be compensated for through an increase in lending rates.

JN Bank, however, is trying to send a different signal.

"We are not about fees," Hayden-Cater said. "We are a member-owned organisation, so we want to make sure all of our members get service and benefits to improve their financial lives."

Hayden-Cater said JN Bank will offer lower fees than those that currently prevail in the market, but declined to cite specific examples.

Under the transformation of Jamaica National, Earl Jarrett continues as the overarching head as CEO of JN Group and he also heads the JN Financial division.

Jamaica's deposit-taking or banking system - comprising commercial banks, building societies and merchant banks - are valued overall at $1.35 trillion. One of the two merchant banks, JMMB, will also be transforming to a commercial bank.