Caribbean operations help prop up JMMB

Published: Friday June 6, 2008

The 200 per cent growth in share of profits from its Caribbean associated companies bouyed Jamaica Money Market Brokers (JMMB) group profits for the year which fell marginally by four per cent, a soft landing compared to the nearly 20 per cent drop in profits from its Jamaican operations.

"Toward the latter part of the year, our clients started to come back home," said JMMB Group chief executive officer, Keith Duncan, at a press conference held at JMMB's Haughton Terrace headquarters.

For the fiscal year ended March 31, 2008, the Jamaican operations booked net profits of J$943 million, a 18 per cent drop from the J$1.148 billion earned in the fiscal year ended March 31, 2007. As several high-profile alternative investment schemes collapsed, JMMB executives noted that they were seen as a place of safety.

Investors turning to JMMB

"We are coming from far," Duncan noted, "Ten years ago, we were like the alternative investments in that we were new. Now, we have developed into a place that investors have confidence in as a place where when they put their money with us, it will be there for them." And despite a downward trend in profits, Duncan pointed to the 72 per cent growth in fees earned from managing funds on behalf of clients. For the 2008 fiscal year, JMMB earned J$95.9 million compared to the J$55.8 million earned in the 2007 fiscal year.

Cambio service proves a winner

Additionally, retail clients took full advantage of JMMB's cambio service, driving earnings from that division up by 82 per cent from $64.8 million earned in fiscal year 2007 to $117.7 million earned in fiscal year 2008.

Looking at the expenses, there was a 28 per cent jump in administration expenses which Duncan attributed to staff costs driven by inflation and increase in capacity. There was also one-off developmental investments to build out its credit, pension and insurance divisions. Duncan noted that while these were expenses, in his view they were really investments in the future.

In comparison, the JMMB Group which comprises the Caribbean Money Market Brokers (CMMB) partnership with Caribbean finanical giant, Clico, brought in net profits of J$1.062 billion for the fiscal year under review, a four per cent slip from the J$1.099 billion earned for the March 31, 2007 period. Duncan called the Caribbean contribution, "a great turn around" CMMB Trinidad and Barbados experienced a rebound in profitability as interest rates stabilised in these countries. Overall, there was a 145 per cent growth in profits coming from the CMMB association.

The Intercommercial Banking Group profits increased from J$76 million to J$235 million for the fiscal period ended March 31, 2008.

This growth underscores the importance of regional diversification.

Going forward, JMMB plans to open a new branch in Savanna-la-Mar and establish five new electronic teller machines. The company also plans to aggressively sell its existing product lines to its 120,000 client base and launch its corporate financing facility.


Source: Jamaica Observer
http://www.jamaicaobserver.com/magazines/Business/html/20080605T210000-0500_136422_OBS_CARIBBEAN_OPERATIONS_HELP_PROP_UP_JMMB.asp