JN still awaiting Cayman banking licence
Published:Wednesday | May 25, 2022 | 12:09 AMKarena Bennett/Business Reporter
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More than a year has elapsed since the Jamaica National Group applied for a banking licence in the Cayman Islands, but it’s hopeful of landing the permit by the advent of summer. Cayman Islands would become the third commercial banking market for...
More than a year has elapsed since the Jamaica National Group applied for a banking licence in the Cayman Islands, but it’s hopeful of landing the permit by the advent of summer.
Cayman Islands would become the third commercial banking market for the group, in addition to its home base of Jamaica, through JN Bank Limited, and the United Kingdom, where it gained a licence at the end of 2019. The financial group’s transition from mortgage banking to commercial banking began in 2017.
Its application for a Category A banking licence in the Cayman Islands was made in December 2020. If approved, JN estimates that its investment in the buildout of the banking operation could run to US$15 million.
“This, of course, is continuously being assessed as work continues on the infrastructural buildout,” the company said.
The UK licence, which is said to be a first for a regional bank, served to expand its business footprint, but also offered JN a solution to the correspondent banking issues. Its push for a Cayman banking licence is a little different; it’s more focused on getting around regulatory constraints of the Building Societies Act of Cayman and restrictions that the bank says stymied its Cayman operation’s ability to grow.
JN Cayman, formerly the National Building Society of Cayman, was established on October 5, 1992, under the country’s revised building societies law. It operated under local management until 2002, when the Jamaica National Building Society assumed majority ownership.
Under the law, a building society can only lend up to 75 cents of each dollar in its savings portfolio.
CURRENT RESTRICTIONS
“With the current restrictions, there is a challenge in growing consumer loans and expanding the book of business. The application for the commercial banking licence should help to address this concern,” JN said in response to queries from the Financial Gleaner.
By securing a banking licence for its Cayman operation, JN also expects to better compete in the loans market.
Cayman has 10 banks operating under Category A licences, which allows a bank to do business in both the domestic and international markets, providing services to residents and non-residents of the country.
Another 101 banks hold Category B licences, providing only offshore banking services to individuals and corporations.
JN aims to serve the general Cayman population through its Category A licence, to include existing members, Caymanians, Jamaicans in Cayman, the wider population, inclusive of foreign nationals, and JN Group customers.
The bank says it will also target the unbanked and under-banked, as a means of promoting financial inclusion, as guided by the regulatory authority.
Talks continue between JN and the Cayman Islands Monetary Authority, which has responsibility for licensing and regulating banking and trust businesses.
“I thought we had a good meeting, and hopefully a decision will be made soon,” JN Group CEO Earl Jarrett said last Wednesday, during the company’s annual general meeting. “For us, it’s important that the decision is made in the first half of the year, because the fee is not prorated for time,” he said.