Jamaica Money Markets Brokers Limited has applied to the central bank for a commercial banking licence, which, if approved, will grow the sector to eight licenses.
"The application was submitted late Wednesday evening, March 26," said Marguerite Cremin, the brokerage's marketing manager.
"Having submitted the application, no further communication was received from BOJ except that the application has been received.
"JMMB had disclosed plans to expand into commercial banking in its home market last year, saying it was part of the company's 2010 vision.
The 15-year-old brokerage, which is currently capitalised at $7 billion, is already engaged in commercial banking in Trinidad, but only as a very small player with 50 per cent ownership of the three-branch Inter-Commercial Bank.
Among of the criteria the Bank of Jamaica looks for, aside from the 'fit and proper' background checks on the principals seeking the banking licence, is the health of the company or group operation, which includes a three-year review of its financials.
The central bank also seeks to satisfy itself that the proposed bank won't be so intricately woven into a web of group companies so that its regulation is made difficult.
"In assessing the supervise-ability of such financial groups, the Bank of Jamaica considers the complexity of the corporate structure of the group and impact on supervisory reach (and) the potential for prudential concerns such as contagion, connected lending, etc," the guide to licensing application reads in part.
Since December, as it hunts acquisitions and opportunities for deals in Jamaica and Central America, JMMB has raised more than $2.5 billion of added capital via three issues of preference shares on the Jamaican stock market and is seeking an additional $350 million from a yearlong pref placement to fund its programmes.
The brokerage house conducted a demand study late last year to help inform the decision on whether the market was open to its offer of commercial banking services, but did not disclose the findings.
The sector currently comprises six operating banks, dominated 72 per cent by National Commercial Bank and Scotiabank Jamaica.
The seventh to be launched Pan Caribbean Financial Services, is expected on the market mid-year, though its licence was granted two years ago in April 2006.
It is the finance minister who grants the licence, but acts on the advice of the
BOJ.
Source:sabrina.gordon@gleanerjm.comJamaica GleanerFriday April 4, 2008 http://www.jamaica-gleaner.com/gleaner/20080404/business/business5.html
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