JMMB profits up 110 per cent

Jamaica Money Market Brokers (JMMB) has reported strong performance for the nine months ended December 2011 with net profits up 110 per cent to $1.79 billion, the growth attributable to effective management of its investment portfolio.

"Management continued with a focused strategy of effectively managing the Group's investment portfolio and costs of funds given the environment of declining interest rates," JMMB reported in its directors' statement to shareholders.

For the reporting period, JMMB, which is still in discussion to acquire 100 per cent of the issued share capital of Capital and Credit Financial Group (CCFG) at a price of $4.55 per share, said net interest income showed positive growth year-over-year, moving from $1.76 billion to $2.59 billion, an increase of 47.4 per cent.

But with the declining interest rate trend the company has been focusing more on growing its fee-based products.
The thrust to acquire CCFG falls within that ambit, as it has long sought after a commercial banking license in efforts to diversify product offerings. 

During the reporting period, the company launched two new products, one of them the JMMB education solution, which provides a combination of financial services and savings products, providing returns the company said was three times that of a regular savings account.

The company also launched a debt consolidation loan product, luring consumers by offering them the option of refinancing their high interest debts.

Operating revenues were up 63.2 per cent to $4.4 billion, while gains on securities trading increased by 78.7 per cent to $1.5 billion, and fees and commission income grew by 32.8 per cent to $177 million.

JMMB also reported a 32.6 per cent growth in new clients year-on-year.

The company, which last traded at $11.20 on the Jamaica Stock Exchange, said that despite increases in expenses for the period, efficiency ratios reflected improvements.

Administrative costs as a percentage of operating revenue decreased to 49.7 per cent from 65 per cent during the corresponding period the year before, JMMB said.

With the payment of a $64.4 million bonus to staff, and costs relating to legal and professional fees of $53.6 million associated to the company's strategic initiatives, JMMB said expenses grew by 17.14 per cent to $2 billion.

On balance sheet, JMMB has assets totalling $121 billion, with cash and cash equivalents at the end of the reporting period amounting to $3.7 billion.

sabrina.gordon@gleanerjm.com