JMMB combines Dom Rep bank holdings
JMMB Group acquired full control of saving and loans bank Corporacion de Credito America SA in February, for which it recorded a net loss of nearly $88 million.
JMMB will wind up the bank and transfer its portfolio to Banco Rio, another bank it operates in Dominican Republic.
"JMMB Group was interested in gaining majority control of Corporacion de Credito America in the Dominican Republic in a bid to continue to its expansion in that country," JMMB Group Chief Financial Officer, Patrick Ellis, told Gleaner Business.
The company increased its holding in CCA from 80 per cent to 100 per cent after receiving CCA shareholder and regulatory approval. The transfer of CCA's business to Banco Rio resulted in net liabilities of RD$32.2 million, which translates to $87.6 million in Jamaican currency. The acquisition vehicle used by the group, JMMB Holding Company SRL, was required to invest a similar amount in Banco Rio to cover the losses.
JMMB previously explained that the combined entity would create a US$25 million bank with 6,000 clients.
Up to March, the CCA bank held $1 billion
in customer deposits as its main obligations. The Jamaican-owned financial conglomerate used JMMB Holding Company to transfer the acquired assets and liabilities of CCA in February following regulatory approval last year.
The transaction was disclosed at the release of JMMB Group's yearly financial report for the period ending March 2017.
JMMB initially acquired shares in CCA in 2010, but it cited regulatory delay for the full takeover of the savings and loan institution.
"The regulatory delay was due to the additional regulatory requirement of 100 per cent approval by shareholders for the sale of the entity," said Ellis. "The assets and liabilities of CCA were transferred to Banco Rio and is expected to bolster the portfolio of Banco Rio," he said. The group acquired 90 per cent of Banco Rio in 2015.
JMMB Group, which operates in Jamaica, Dom Rep and Trinidad & Tobago, made $3.4 billion in annual profit on revenues of $14.6 billion. Net profit rose 45 per cent over the 2016 financial year.