Sat | Dec 10, 2016

Mortgage bank to offer project management service

Published:Friday | January 9, 2015 | 12:00 AM

Tameka Gordon, Business Reporter

The Jamaica Mortgage Bank (JMB) has entered the project management market and will offer construction and financial supervision for local projects being done by persons living overseas.

The new service will be launched in February.

"One of the strengths that we have developed over the past 40 years in the housing construction financing business is the technical and project management side of the business," general manager Courtney Wynter told Financial Gleaner via email.

The new line of business is expected to boost the JMB's revenues by 10 to 15 per cent "over time", Wynter said, while noting the service primarily targets persons overseas who want to build or renovate their homes in Jamaica.

JMB revenues average $240 million per year, according to Ministry of Finance data.

The project management service will "include close monitoring of construction projects by the bank to ensure optimal output," the general manager said.

"By offering this service to the diaspora, we believe we can increase the chance of such individuals having a completed home on their return to Jamaica," Wynter reasoned.

The state mortgage bank will also offer the service to other lenders that offer construction financing, "but are not as strong on the monitoring and technical side.

"The plan is to market our technical services to other financial institutions that offer interim construction financing but do not have the internal technical capabilities to monitor the projects," said the JMB head.

"Many of our competitors in the financial sector offer interim housing construction financing, but do not have the technical competence to monitor the development/projects to identify and mitigate against various construction risk. Having this competence adds significant value to the ultimate success of any financing arrangement," he said.

While the JMB typically undertakes financing projects on its own, he said the bank recently conducted a financing project with the National Commercial Bank Jamaica (NCB), indicating the new venture was inspired from this.

"Recently, we were the lead bank on a syndication arrangement with NCB to finance one of the largest housing construction deals in our recent history."

The two lenders are jointly backing 138 Student Living Limited's construction of student housing at the University of the West Indies, Mona campus.

Regarding the mortgage bank's ability to deliver on its new project management service, JMB director of business operations, Hecton Hemans, said the bank already had expertise from its core business of mortgage financing.

JMB does rigorous project risk analysis and technical evaluation during the application and decision process for mortgage and construction financing, he said, and upon approval of the projects, the bank does continuous monitoring of projects.

"We are promoting our technical services and a partnership-type arrangement with all clients to achieve a higher project implementation success rate, engender trust, customer retention and repeat business," said Hemans.

tameka.gordon@gleanerjm.com