The JMMB Group reported net profit of J$2.03 billion, for the six month period ended September 30, 2016, which reflects a 68% increase over the corresponding period last year. Additionally, the Group’s net operating revenue grew by 31.2%, totaling J$7.70 billion over the six month period.

The uptick in the Group’s performance was largely driven by the company taking advantage of market opportunity – attributable to bullish market sentiments on emerging market assets, arising from both the outlook for Federal interest rates, as well as the implications of Brexit on interest rates in Europe. Additionally, in August 2016, there was a tender offer by the Government of Jamaica for its 2017 and 2019 global bonds, which proved favourable for the Group’s portfolios. Following the tender offer, market liquidity also increased, which resulted in higher levels of trading.

The JMMB Group also saw growth across its core revenue activities namely: net gains on securities trading; net interest income; fee and commission income; and net foreign exchange trading of 52%, 18%, 26% and 23% respectively. Gains on securities trading grew by J$1.10 billion, thereby totalling J$3.19 billion at the end of the reporting period. The Group’s net interest income (NII) rose to J$3.26 billion, an increase of J$491 million, when compared to the prior period. This increase is attributable to growth in the loan and investment portfolios, in addition to higher spreads. Fee and commission income also grew by J$113M to J$554.3 million, year-over-year. Furthermore, the suite of managed funds and collective investment schemes (CIS) across the Group grew by 37% (or J$99.03 billion), when compared to the corresponding period. This increase was positively impacted by strong growth in the company’s unit trust, pension business and the introduction of the first USD real estate closed investment (REIT) fund in August 2016. Additionally, net foreign exchange trading revenue increased by J$127.3 million to J$689.3 million, relative to the prior year on account of increased volume activity across the region, coupled with a one-off market opportunity in the first quarter.

The Group continued to enhance its integrated sales and support frameworks to ensure seamless and standardized operations across the region. Operating expenses moved from J$4.16 billion to J$5.08 billion over the corresponding period, due to start-up costs in the Dominican Republic and inflationary increases in all territories. Although operational expenses increased, the Group ended the period with an operational efficiency ratio of 65.8%, which compares favourable to 73.0%, for the corresponding period.

Consistent with the Group’s strategy to diversify revenue across the region, operating revenue grew substantially in all the territories; with Trinidad and Tobago showing an increase of 17% in operating revenue from its core banking business; while operating revenue from the Dominican Republic grew by 19% and reflected in part, the growth of the asset management and mutual funds business lines. However, due to the increased trading activity in Jamaica, that country retained the lion share of the revenue generated by the financial entity, totalling J$5.9 billion in operating revenue.
At the end of the second quarter, the Group’s asset base grew by 7%, totalling J$247.42 billion, up J$16.81 billion, when compared to March 30, 2016. This growth was due primarily to larger investment and loan portfolios; with a credit quality that continues to perform well against international standards.

The Group continued to be adequately capitalized as its capital base increased by 21% (or J$4.7 billion), to end the period at J$27.42 billion. Moreover, the individually regulated companies within the Group continued to exceed the regulatory capital requirements.

Keith Duncan, JMMB Group CEO, in commenting on the performance of the Group over the six month period notes, “We remain steadfast in maximizing long-term shareholder value through our regional integrated financial services model. The recent approval from the Bank of Jamaica to upgrade the operations of JMMB Merchant Bank in Jamaica, to a commercial bank, reinforces our drive to offer our clients a full suite of financial solutions. At this time, the JMMB team is executing our plans to transition into commercial banking operations.” Additionally, the company continues to bolster its digital services delivery channels; reengineer some of its processes; and further enhance its sales force and client experience, in order to deliver on its client value proposition.