By: Kimberly Ramkhalawan
July 29, 2022
JMMB Group posted a net profit of J$ 12.01bn representing a growth of 56 percent over the prior year. The group shared this record profitability for the financial year ending March 2022. It says this came ‘notwithstanding the continued economic and social challenges arising from the COVID-19 pandemic and, in the final month of the financial year, the outbreak of the Russia – Ukraine geopolitical crisis.
According to group Chairman, Archibald Campbell, in his message, ‘core businesses of the Group including its Banking Services business lines, continued to show steady growth’. The report themed ‘Celebrating thirty years of love’, also marking its anniversary, shared that the group saw an operating revenue of J$26.64bn, an increase of 19 percent also over the prior year, while earnings per share stood at J$5.85. To Mr Campbell, the report ‘shows the benefit of having diversified business lines that are broader and more balanced than in the past, making them less subject to impacts from the external environment’. He added that the company’s ability to maintain its CariCRIS Rating which indicates good creditworthiness.
In June this year, CariCRIS awarded JMMB with a ‘jmA (Foreign Currency Rating) on the Jamaica national scale to the up to US $160M bond issue of JMMB International Limited (JMMBIL). The national scale rating indicates good creditworthiness compared to other obligors in Jamaica, while a stable outlook on the ratings. The stable outlook is premised on CariCRIS’ expectation that over the next 12 to 15 months JMMBIL will continue to record good financial performance to support debt repayment.
Group Financial data shows that Total assets stood at US$614,466,251.by end of March 2022. With respect to business line diversification, the Group says it has continued to place strategic focus on the banking segment in driving overall growth. This focus has thus far realized for the Group cumulative growth of J$6bn or 119 percent increase in contribution to operating revenue between financial years 2017/18 and 2021/22.
It added that ‘given an accommodative environment for the better part of the year, contribution from the Group’s operations in the Dominican Republic moved from 14 percent to 35 percent, while despite Trinidad and Tobago’s persisting economic recession, there was increased economic activity from 7 percent to 17 percent. On the contrary, Jamaica was negatively impacted by rising interest rates and by extension a decline in bond prices (which was exacerbated by the outbreak of the Russia-Ukraine geopolitical crisis) in the latter part of the year. These operations’ contribution thus declined, moving from 79 percent to 48 percent.’
For Jamaica, JMMB says its economic concerns within this market lies in the issue of inflation as ‘the prime policy driver of the Central Bank, rising US interest rates pose a risk to stability in the foreign exchange market’. The investment company says it therefore, expects the current ‘policy rate to continue to increase in FY 2022/23 because of high inflation expectations and rising US interest rates, nor does it see this changing in the next six months. At the end of March 2022, the Jamaica dollar traded at an exchange rate of $153.78 relative to the US dollar. The Jamaica dollar depreciated by 4.9 percent on an annualized basis’, and sees ‘the economy at risk of falling into recession in 2023, the fiscal balance possibly swinging into a deficit, and the debt ratio rising’.
The bank describes it Dominican Republic portfolio as having ‘slower global growth, pervasively high inflation, geopolitical uncertainties, and tighter fiscal and monetary policies dominate the Dominican Republic’s macro-fiscal outlook’. It however notes that real GDP will decelerate to 5.0 percent in 2022. Although the Central Bank is increasing interest rates and liquidity levels have fallen in the banking system, loan growth remains relatively strong
As for its Trinidad and Tobago market, JMMB views ‘the overall macroeconomic fundamentals in Trinidad and Tobago as stable and risk level as low to medium over the medium-term’. However, cites government’s inaction in certain areas as reasons for concern, including the ‘failure to control the deficit could create a vicious cycle of unsustainable fiscal and debt dynamics’. It further makes mention of what it characterizes as Trinidad and Tobago’s ‘social challenges’, with reference to its ‘upsurge in violent crimes’. It calls on the government to ‘carefully balance its policy action to reduce the fiscal deficit while ensuring that critical sectors in the economy are not underserved’. It further mentions that ‘if the government cannot deliver on its fiscal and social prerogative, it could undermine economic growth and development’.
The investment company says it has commenced moves to incorporate more of its Environmental, Social and Governance matters, ESG into its business and Corporate Social Responsibility strategies. The JMMB Bank says it has partnered with energy providers as well as developers in order to further its sustainability agenda and reduce the overall environmental impact of its operations across its portfolios. These steps include addition and expansion of solar panels at its buildings, reduction in the use of paper, as well as the encouragement to recycle plastic, paper and even composting with its staff. Apart from its in-house services, the bank says within its most recent fiscal year, over $4.7M worth of renewable loans was also issued.
In marking the 30-year milestone in 2022, observance is focused on its founder, Joan Duncan, and cofounder, Dr. Noel Lyon for their vision to create the first money market brokers in the Caribbean, and paving the pathway for what JMMB is today with several business lines and service offerings.
The company intends to host its Ninth annual general meeting on Thursday September 22, in a hybrid format at the Jamaica Pegasus Hotel, Grand Jamaican Suite.