JMMB plans banking merger in DomRep
JMMB Group Limited plans to merge Banco Rio de Ahorro y Credita and Corporacion de Credito America (CCA), two companies it is in the process of acquiring in the Dominican Republic.
Juan Melo, the head of investment banking at Puesto de Bolsa, a JMMB securities subsidiary, said Monday that the merger of both entities will create an institution with approximately US$25 million in assets and more than 6,000 clients.
JMMB is acquiring 90 per cent of Banco Rio and 80 per cent of CCA.
"To execute the merger, the minority shareholders in each institution will receive shares in the new entity in exchange for their old shares and, therefore, become minority shareholders in the new entity," said Melo via email.
The CCA acquisition was approved by the Superintendent of Banks and is pending final approval by the Monetary Board of the Central Bank, while the Banco Rio transaction is under review at the Superintendent of Banks and should be sent on to the Monetary Board at the central bank in a couple of weeks for its perusal, JMMB said.
The entities will be merged and renamed JMMB Bank. It will operate as a savings and loans institution.
"The group will also benefit from the cross-selling opportunities between Puesto de Bolsa and Banco de Ahorro y Credito," said Melo.
Banco Rio was founded in 2004, but began operating in 2005. Its products and services include savings accounts, certificates of deposit, money exchange and consumer, commercial and SME loans. Banco Rio is based in Santo Domingo and is a subsidiary of local company Enchamar.
CCA offers savings accounts, loans, credit cards, and cambio services to the retail market. It was founded in 1971 and formerly operated as American Premium Funding SA.
JMMB has indicated plans to acquire the 80 per cent stake in CCA from 2009, according to previous Gleaner reports, with the cost of the deal then said to be about US$1.2 million.
The company said Tuesday that the closure of the transaction has been pending regulatory approvals for the past five years.
JMMB is banking on the growing needs of the population of 10.5 million in the Dominica Republic to fuel its expansion plans and banking foray. The country's economy experienced growth of 4.1 per cent during 2013, according to its central bank. Inflation was reported at under four per cent, and consumer credit grew by 16 per cent during the year.
Melo reported this month that Puesta de Bolsa, also referred to as JMMBDR in company reports, was number one in net profit among brokerages, with US$10.39 million earned in fiscal 2013-14.
The investment firm has three branches in the DomRep - two in Santa Domingo and one in Santiago. JMMB's operations in Dom Rep is overseen by country head Guillermo Arancibiames.