Update: VMBS branching out in Jamaica and New York
Victoria Mutual Building Society has secured regulatory approval for an office in New York in the United States and will be opening in Brooklyn within the next nine months.
VMBS currently has 15 branches in Jamaica, three representative offices in the United Kingdom and one in Florida.
"Jamaicans in the tri-state area account for a significant segment of our portfolio. They are already saving and borrowing with us, but the office will be for those who appreciate personal interaction," VM Group President & CEO Courtney Campbell told the Financial Gleaner on Friday after making the announcement at their 139th annual general meeting the previous day.
Campbell said the Brooklyn office will be run from leased space and will have a staff of two. He noted that a representative office is unlike a full service branch in that offers limited services and accounts cannot be opened.
VM is also building out new office space in Fairview, Montego Bay and will open the 16th branch in December, while keeping open its Market Street offices in the city.
The cost to set up the New York office was not disclosed, but Fairview is costing in the region of $400 million, including acquisition and renovations, Campbell said.
Market Street is also set for renovation, and will shift to leased space on the same street for 12 months until the project is concluded.
The total capital expenditure planned for the 2018 financial year is just under $3 billion, to include $400 million for the operations at Fairview, $250 million for refurbishing of other buildings and more than $2 billion for information technology solutions in continuation of the company's digital initiatives.
VM Group has already spent $2.2 billion to date on digitisation, including an online mortgage portal, company officials told members of the society at the meeting.
The group continues to pursue diversified revenue streams, including the introduction of commercial mortgages for small and medium-sized companies, a new approved retirement scheme, insurance financing and lease financing. Come July, VM will also be offering personal and automobile loans.
VM expects new products to account for around 10 per cent of the loan portfolio over two years, said Campbell, even while assuring members that the delivery of residential mortgages, which is the society's mainstay, would remain the core focus.
HUGE MORTGAGE PORTFOLIO
Currently, VM's loan portfolio comprises 95 per cent mortgages and 5 per cent secured loans.
In 2017, VM grew its mortgage portfolio by 28 per cent to nearly $42.7 billion, while total loans were more than $44 billion. Total assets climbed nearly 10 per cent to $123 billion. The group made a surplus of $1.03 billion, up from $856 million the previous year.
Commercial mortgages, Campbell said at the AGM, are now being offered for 15 years with 60 per cent of financing, and cash-secured loans for 10 years. Local banks, he commented, offered both products for a maximum of five years.
VM has also developed an innovation lab and launched a campaign to improve sales practices, a project currently being managed by Rezworth Burchenson, who is CEO of VM Pension Management Limited
"We wish to see more of you have more than one product," Campbell said, noting VM would be pursuing up-selling and cross-selling of products.
CORRECTION: This story has been updated to correct the terms for commercial mortgage loans and to clarify that it is cash-secured loans, not unsecured loans, that are available on a 10-year term.