Nov 2014 Financial News

JMMB reports operating revenue growth of $4.98 billion. $1.2 billion net profit for January-September

Nov 19, 2014

The JMMB Group on Monday said it posted an operating revenue of $4.98 billion, reflecting a 19.9 per cent increase over the January to September period last year and explained that the growth is largely attributable to the expansion of the group through acquisitions.

The company -- which operates in Jamaica, the Dominican Republic, and Trinidad and Tobago -- also reported a net profit of $1.26 billion for the period despite earnings per share falling to $0.74, when compared to the previous period. But that, JMMB said, was a result of a corresponding increase of operating expenses from $2.34 billion to $3.48 billion.

According to the company, the increase in the operating expenses was largely due to costs associated with the full expansion of the group, through the acquisition of Intercommercial Bank Limited (IBL) in Trinidad and Tobago, which accounted for $715.1 million.

"This expansion is in keeping with the JMMB Group's strategic direction to become a regional integrated financial services provider; as a result, JMMB Group has embarked on a series of integration activities; continues to institute process re-engineering and other operational efficiency initiatives; as well as actively manage its operating expenses and further enhance revenue growth," the company said in a news release on Monday.

"Operations in the Dominican Republic continue to produce positive results, contributing J$274.9 million to the group, while operations in Trinidad and Tobago contributed J$121.3 million to the group's earnings," JMMB added.

The group also said its Net Interest Income (NII) showed positive growth year-over-year, moving from $2.41 billion to $2.70 billion, an increase of $289.6 million or 12.0 per cent. "This was attributed to the expanded business line coupled with effectively managing the group's investment portfolio and cost of funds," the release said.

"Other operating revenues that contributed to the group's performance included gains on securities trading; foreign exchange margins from cambio trading; and commission income which saw a 17.5 per cent, 112.8 per cent and 34.8 per cent growth, respectively, driven primarily by volume increases and taking advantage of market opportunities," the company added.

In addition to the operating expenses attributed to the acquisition of IBL, other expenses amounting to $420.9 (37 per cent of the operating expenses) moved upwards due to costs associated with integration, growth in subsidiaries in the regional markets, increase in asset tax and normal inflationary increases.

"This increase in operating expenses was reflected in the corresponding increase in the group's efficiency ratio, which moved to 69.6 per cent when compared to 56.3 per cent, in 2013," JMMB said.

The group said that as it seeks to maximise on the synergies to be derived from the integration of its newly acquired entities, it will continue to streamline measures to ensure that the growth of revenue outperforms operational expenses.

"The company continues to exceed its regulatory capital requirements, with its capital to risk weighted assets ratio standing at 14.4 per cent, when compared to the Financial Services Commission benchmark stipulation of a minimum of 10 per cent. Additionally, at 12.8 per cent (2013 - 11.9 per cent), the company's capital to total assets ratio also bettered the FSC benchmark of six per cent," JMMB said.

Summary of key performance highlights:

* Net Profit of J$1.26 billion

* Earnings per share J$0.74

* Net Interest Income up 12.0 per cent

* Operating Revenue of J$4.98 billion, grew by 19.9 per cent

* Efficiency ratio 69.6 per cent (2013 - 56.3 per cent)

* Capital base grew J$18.7 billion to $20.9 billion

A section of JMMB's offices at Haughton Terrace in Kingston.

 

Source:
Jamaica Observer
Wednesday November 19, 2014    

http://www.jamaicaobserver.com/business/JMMB-reports-operating-revenue-growth-of--4-98-billion_17965478