Nov 2010 Financial News

JMMB profits up by 25 per cent. Diversification pays off!

Nov 12, 2010

Local finance house Jamaica Money Market Brokers (JMMB) continues to have a good year despite the challenges posed by both the local and international economy which it must be said is a testament to its risk mangagement capababilities and the prudent husbandry of its assets and liabilities.

For the six-month period ended September 30, 2010 JMMB reported a net profit of J$454.7 million, a 57 per cent improvement over the first quarter and 25.2 per cent increase over the same period last year. Net interest income moved from J$769.7 million last year to J$1.1 billion for the period under review, thus registering a 37.6 per cent increase. The efficiency ratio (administrative costs as a percentage of operating revenue) improved to 66.4 per cent from 74.9 per cent when compared to the corresponding period. JMMB arrived at the fortunate position of seeing revenues grow twice as much as the growth in expenses. Operating profit came to J$594.3 per cent spelling an increase of a whopping 72.8 per cent on last year's second quarter numbers. The increase in operating profits has been attributed to the Group's efforts to grow revenues and implement a number of efficiencies.

Keith Duncan

JMMB has set about establishing a one -stop shop for financial services and this strategy appears to be paying dividends. According to an issued release, cambio volumes increased by about 120 per cent for the second quarter as compared with the first quarter leading to a 40 per cent increase in cambio margins for the period under review.

The Group's bond trading continues to hold up as retail and corporate clients look to higher yields than those offered by the repo market. JMMB Group CEO Keith Duncan is patently aware that clients are looking to diversify their portfolio outside of Jamaica and so the lure of sovereign and corporate bonds has become appealing.

Last year saw JMMB venture into the pensions arena and it has paid off handsomely with a 25 per cent increase in funds under management for the period under review. Furthering the good news, was a 41 per cencrease in the pension unit's membership.

JMMB Insurance Brokers also made its presence felt in the market place and is now a player to watch with revenues up 57 per cent on last year's six-month figures. This revenue growth was spurred by a 132 per cent uptick in its general insurance business. The jewel in the crown has been its car insurance line called Motor Smart Pak which is competitively priced.

The cross selling strategy has been the key to JMMB's success this year and it has struck a cord with its 160,000 clients. The contracting local economy has not cooled the ardour of JMMB and this year it launched two new products, Smart Choice Home Insurance and Smart Biz which is a bundles commercial insurance product which comes at a flat premium.

Speaking with Caribbean Business Report yesterday, Group CEO Keith Duncan said: "JMMB continues to grow its earnings and is on track to see a continued uptick in its profitability. We have noticed that our growth is coming from our core revenues. Most importantly we are gaining more traction in international markets particularly in the Dominican Republic. In that country we are offering an integrated value proposition for our clients. In Trinidad we are getting ready to enter the securities dealers market as we look to re-establish our presence there. We see a number of acquitition opportunities both localy and internationally."


Source:
By Al Edwards
Jamaica Observer
Friday November 12, 2010

http://www.jamaicaobserver.com/business/JMMB-profits-up-by-25-per-cent_8143522