Build-Out Of The Commercial Bank Operations In Jamaica Expected To Reap Greater Synergies And Operational Efficiency – Keith Duncan
The JMMB Group recorded net operating revenue of J$12.28 billion for the nine-month period, ending December 31, 2017; this reflects an 11% growth in its operating revenue compared to the corresponding prior period. The financial entity reported net profit of J$2.58 billion, for the same period, which is a marginal decline of approximately 4%, over the comparative period.
During the reporting period, net interest income grew by 12% or J$593.9 million to J$5.66 billion, as a result of strong growth in the loan and investment portfolios and an effective spread management strategy. Fees and commission income also increased by 53%, totaling J$1.31 billion, as a result of significant growth in managed funds and collective investment schemes across the Group. JMMB Fund Managers Ltd. also introduced its second US dollar denominated money market fund, JMMB USD Giltedge Money Market Fund, to the market, during the reporting period. The introduction of this fund brings the total number of funds offered in its portfolio to eight (8).
In addition, net gains on securities trading grew by 5% to J$4.39 billion, when compared to the prior period, on account of the Group taking advantage of increased regional market opportunities. Net foreign exchange trading gains saw a marginal decline by 4%, or J$39.4 million, to J$891.6 million. However, during the comparative prior period, the Group benefitted from a one-off market opportunity.
In the Dominican Republic (DR), there was marked improvement in the overall performance of the portfolio of those subsidiaries, resulting in an increased contribution towards the overall Group’s profitability.
The Group’s financial performance was impacted by the continued build-out of its commercial banking operations in Jamaica, which saw JMMB Merchant Bank being transitioned to JMMB Bank (Jamaica) Ltd in August 2017. In order to facilitate the seamless integration of JMMB Bank, continued enhancements have been made to the operational procedures, infrastructure and technology, as well as expansion of the branch network, in keeping with the Group’s integrated financial life goals centre approach.
In addition, the current reporting period reflects the full impact of the incremental costs associated with the enhancement of the integrated Group sales and support framework, which were added during the prior financial year. As a result of these costs, the Group’s operating expenses grew to J$8.71 billion, for the reporting period, which is a 14% increase, when compared to the prior period.
Keith Duncan notes that over time, the build-out of the commercial bank operations in Jamaica is expected to reap greater synergies and operational efficiency, as the financial entity seeks to better serve its clients and maximize shareholder value. He also pointed to the overall credible performance of the Group’s operations across the territories in which JMMB Group operates.
JMMB Group’s total assets for the period amounted to J$270.53 billion, up J$18.98 billion, or 8%, compared to the start of the financial year. This was mainly on account of higher cash holdings as well as larger loan and investment portfolios.
Additionally, the entities across the Group remain adequately capitalized, exceeding regulatory capital requirements, as evidenced by the Group’s increase in its equity base which ended the period at J$29.62 billion, an increase of 11%.
In sharing the way forward, Keith Duncan, noted that as the Group looks towards the fourth quarter, there will be increased focus on operational efficiency and capital management. In addition, the Group remains optimistic about the future growth of its investment portfolios, mutual funds and banking subsidiaries across the Group. The CEO added that, the financial entity remains committed to its regional integrated financial services strategy, and will continue to provide financial coaching, rooted in love and the best interest of all clients, team members and the community.