For the nine-month period ended December 31, 2023, JMMB Group continued to grit its teeth as it rides out debilitating impacts.

Net interest income took a hanmmering due in the main to the high interest regime and cost of funds which saw JMMB reporting a J$6.40 billion figure, a 24 per cent fall compared to the same period last year.

The nine-month period saw net operating revenue come in at $17.60 billion. Banking and related services contributed $10.6 billion (60%) which was an uptick of 8 per cent compared to the same period last year. This segment line is proving fertile ground for JMMB. Financial services weighed in with $6.6 billion, 38  per cent of net operating revenue. This was a 21 per cent fall off from last year.

Riding to the rescue was JMMB’s 23.44 per cent stake in Sagicor Financial Corporation which contributing some $14.6 billion in profits, therefore taking the Group’s net profit to a creditable $17 billion. This material earning one-off  from Sagicor, spared JMMB’s blushes but nevertheless still spelt a 7 per cent decline year-over-year. 

“Gains on securities trading was a cause for good cheer, rising by 43 per cent to $5 billion.

“Excluding the one-off we would have attributed $2.3 billion to core earnings to the Group. You would have seen our operating profit down to approximately $1.1 billion and that is a reflection of our net interest income being impacted by the high interest rate and cost of funds and therefore we would have had some spread compression.

 “With the interest rate cuts in the Dom Rep, we were able to take advantage of various opportunities there. Our diversification strategy continues to bear fruit for the Group. Part of where we want to focus is our SMART growth strategy. If you look at our other revenue items excluding net interest income and our gains on securities trading income, our FX line across all three territories (Jamaica, Dom Rep, Trinidad&Tobago) contributed $2 billion. Fees from managed funds came in with $3.9 billion which was down by 10 per cent. This was so because of a shift in investor sentiment moving to fixed income. 

“Our capital markets business line continues to do well for us and pitched in with $600 million in revenue. Our intention going forward is to shift that revenue number excluding NII in the short to medium term to  the 40 per cent mark and in the long term to get closer to the 50 per cent line,” said Group CFO, Patrick Ellis at today’s  financial results briefing.

The Sagicor connection produced good dividend flows which netted JMMB some $1.4 billion. With the SFC Group now expanded with its acquisition of Ivory Holdings ( a Canadian individual life insurance company), JMMB will be looking for even greater dividend flows.

JMMB is looking to grow its revenue faster than its expenses but encountered some challenges here for the period under review which saw operating expenses increase by 12 per cent to $16.48 billion. The Group attributes this to both inflationary and project costs. It has invested heavily in digital platforms and solutions. The aim is to see efficacy ratios coming down. JMMB stated objective is to transition into an integrated  financial services provider and not just focused on the product suites it offers.

Its diversification strategy has been JMMB’s saving grace. While Jamaica has fallen off, JMMB has seen an increase in revenue from the Dominican Republic. That market brought in $3.7 billion in revenues, up 4 per cent, signifying 21 per cent of total revenue. Trinidad & Tobago is up by 4 per cent .So whereas JMMB may see a business line impacted in one country, it is mitigated by diversification. This was seen in its numbers as at the end of December 2023.

The JMMB’Group’s total assets as at the end of December 2023 stood at $726 billion, up by 10 per cent. The loan portfolio increased by 14 per cent to $24 billion. The investment portfolio was also up 6 per cent to $19 billion. The deposit side of the balance sheet has grown by 13 per cent to $22 billion. Capital too grew to $72 billion. Earnings per share for the above period was $8.54.

JMMB Group CEO Keith Duncan added: “At the end of the day, what we are trying to deliver for our shareholders and clients is win-win. We have to deliver an increased return on equity (ROE). We have to deliver dividends to our shareholders and to do so, we have to optimise, preserve and grow our capital. We have to manage through the tight monetary policy conditions we see in Jamaica and in the Dom Rep especially. Therefore we have to manage our balance sheet and liquidity so that we can continue to grow in a prudent manner. We believe interest rates will be elevated for some time. We have to diversify our revenue streams with less reliance on net interest income and gains on securities trading .We have to look to more non interest income lines like value added fees where our clients feel good about the services that they are getting and willing to pay fees on. We are looking to increase our FX trading and treasury activity. We must deliver more off-balance sheet products to our clients which will increase our non interest income revenue lines.”