Donna is back and hunting business
Published:Friday | March 11, 2011 | 12:00 AM
JMMB open to merger deal
Lavern Clarke, Business Editor
After more than four years playing a largely background role in Jamaica Money Market Brokers (JMMB), Donna Duncan Scott is re-emerging as a face of the company.
At the same time, the brokerage is hinting that it is open to approaches from merger partners, preferably one with a commercial banking licence.
The signal, though, is that JMMB would expect its character to be the emergent one in any such arrangement.
Increasingly, Duncan Scott's face, alongside that of her brother Keith, the company's CEO, is being splashed across newspaper and television ads.
Their messages echo the themes by which JMMB has sought to define itself since it founding by their late mother, Joan Duncan, nearly two decades ago: a cozy, family-oriented, ethically run business where one did not have to be wealthy to invest in the money markets.
Joan Duncan, who died a dozen years ago, had the visage of being every person's friend. It is same sense of intimacy that Duncan Scott brought to its leadership when she succeeded her mother in 1998.
But in 2007 Duncan Scott, who remains listed as JMMB's single largest shareholder, ceded the CEO's job to her brother to give herself more time to care for the two young children she had from her recent marriage.
Although she was back in the JMMB fold by 2009 as head of culture, leadership and human resources, Duncan Scott preferred to stay in the background.
In the meantime, Keith Duncan's profile grew. He was credited with leading JMMB through a choppy and uncertain period after the global financial meltdown of 2008.
His older sister's recent re-emergence has, understandably, raised questions in corporate Jamaica on whether Duncan Scott was assuming the role of co-CEO.
"I'm really back now," she agrees.
But on whether the plan is to share the top job with her brother, her unequivocal response: "Not even slightly."
Clearly, though, Duncan Scott's years away from the limelight have done nothing to dampen her voluble, high-energy personality .
She launches off on an explanation of what she aims to accomplish in her role - positioning JMMB as a "cultural organisation" that is responsible to its customers and staff.
Internally, she plans to drive a culture of respect, and building relationships with clients to grow business and "influence returns". Beyond that, she wants to spark a national conversation on corporate behaviour and the conduct of business.
The well-being of staff and customers have always been Duncan Scott's mantra, even when she was head of the company. The very design of the offices with splashes of colour and greenery was part of the culture of relaxed interaction.
JMMB is among the top brokerages in Jamaica, with funds under management of J$115.7 billion, and solid profit performance.
In the nine-month period that closed in December, net interest income rose 34 per cent when other institutions are reporting single digit or declining margins, and net profit rose 31 per cent to J$854 million.
In the early days of the financial crisis, late 2008, JMMB fought back rumours about its financial stability and market concerns about the amount of risk on its balance sheet. It sold its half-share of a securities brokerage in Trinidad to generate cash, and was helped by the special funding window set up by the Bank of Jamaica (BOJ) for margin calls that several companies were facing almost on a daily basis after the Lehman Brothers crash.
Last year, JMMB paid down a J$7-billion loan at one go, which head of marketing Imani Duncan Waite confirmed was payback to BOJ. She said JMMB sourced the cash from two clients.
The company remains highly leveraged with J$104 billion of repo liabilities on its balance sheet, relative to equity of J$8 billion at December 2010. Its capital-to-asset ratio is the lowest among its industry peers at six to seven per cent. Operating cash dropped to J$3.6 billion from J$14 billion a year ago.
JMMB owns a boutique commercial bank in Trinidad, but after the financial fallout of 2008, the firm was turned down by BOJ for a banking licence here, Duncan Scott said.
Nothing stops the brokerage from re-applying in the future but, she said, JMMB is more inclined to partner with a financial institution with a licence, to satisfy the immediate demand by clients who have been asking for the service in Jamaica.
"We are definitely looking at the possibility of merging," said Duncan-Scott, who signalled that when a deal materialises, JMMB expects to be a dominant partner.
"Based on client demand and requests, we are looking at ways to provide commercial-banking services to our clients," she said.
There have been whispers that the brokerage is involved with talks, but Duncan Scott nixed that saying there is "no offer on the table."
The company is open to approaches from local or overseas interests, she told the Financial Gleaner.
In the meantime, JMMB's home court moves to grow business include open invitations to investors with sums as small as J$1,000 to invest.
"We're trying to communicate that we are in business to do business with everyone; building on whatever you have," she said.
It's the same approach that built up JMMB's client base - through exposure of small investors to the world of equity money market funds, bonds, and other securities.
Duncan Scott said the strategy is meant to grow the client base, now estimated at about 160,000, but that a specific target for new business and other growth areas were still under discussion.
"We have to set those goals for this year," she said. "We're now developing strategies."