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Total comprehensive income for half-year period ended March 31, 2021 more than doubled to $1.98 billion

Brokerage and investment firm, Barita continued its big profit performance into 2021, recording a 104 per cent jump in net profits of $2.06 billion for the half -year period ended March 2021.

This is coming from the $1.01 billion documented for the same period in 2020. Net profit for the March 2021 quarter amounted to $1.04 billion compared to the $509.45 million booked during the March quarter last year.

Profit before tax amounted to $2.57 billion for the half year up to March 2021 relative to a profit before taxation of $1.31 billion in 2020. Profit before tax for the quarter improved 89 per cent to $1.26 billion coming from the 2020 posting of $665.85 million.

Taxation for the period under review was $509.60 million compared to $294.09 million a year ago.

Big increase in total comprehensive income

Total comprehensive income for the period more than doubled to $1.98 billion relative to $548.34 million posted in 2020 while for the quarter, total comprehensive income closed at $959.72 million coming from $297.70 million reported for the March 2020 quarter. Net interest income is up by 37 per cent to $740.64 million relative to $540.08 million during the comparable six months in 2020.

In commenting on the growth in profits and income, Barita’s management says, “the rise in reflects continued growth in the Group’s asset base resulting from the deployment of our increased capital position into credit and fixed income assets coupled with a 63 per cent year-over-year (YoY) rise in repo liabilities”.

Net interest income for the second quarter closed at $373.27 million compared to $331.46 million in 2020. However, dividend Income fell 85 per cent to total $629,000 compared to the $4.33 million earned for the six months ended March 31, 2020.

Gains on investment activities fell by seven per cent to $790.81 million. In its half yearly report, the directors explained that, “this business segment relates to managing our proprietary trading portfolio. The decline YoY is attributable to the reduced trading activity experienced during Q2 FY21 versus the comparable period in FY20”.

Decline in trading activity

The directors added that, “this decline in trading activity experienced during Q2FY21 versus the comparable period in FY20. This decline in trading activity is related to the general trends in global fixed income markets during Q2, largely characterised by rising interest rates, which negatively affected fixed income portfolios”.

Fees and commissions income rose significantly by 79 per cent to close at $1.36 billion compared to the $760.41 million posted last year.

Management noted, “the rise in fee income during the period is attributable to an increase in fees generated by investment banking and asset management business lines relative to the corresponding period in FY20. During Q2 FY21, Barita completed several capital markets deals including the landmark Additional Public Offering for Derrimon Trading Company, which was the largest fundraise in the history of the Junior Market of Jamaica Stock Exchange attracting more than $7 billion in subscriptions.”

Big gains on FX trading

Foreign exchange trading and translation gain amounted to $1.14 billion compared to a gain of $106.64 million recorded in the previous year. Barita continued to actively manage the group’s balance sheet foreign exchange exposure in our effort to safeguard shareholder’s equity against trading operations through a combination of greater customer engagement and increased transactional activity.

Other income totalled $13.58 million versus $2.35 million recorded for the similar period in 2020. As such, net operating revenue amounted to $4.05 billion relative to $2.26 billion recorded for the comparable period in 2020.

Net operating revenue for the quarter rose 81 per cent to $2.05 billion relative to $1.13 billion. Administrative expenses for the period amounted to $779.40 million, increasing 50 per cent from $518.91 million in 2020.

Rising staff costs

Staff costs for the six months rose 72 per cent from $345.33 million booked in 2020 to $592.69 million in 2021.

The management has explained that, “the rise in expenses during the quarter reflects the group’s continued investments in the critical pillars of its transformational growth strategy to include acquisition and retention of human capital management, customer acquisition initiatives, and development of key infrastructure to enhance customer experience”.

Impairment/ Expected Credit rose seven per cent to $101.09 million compared to $94.18 million reported in 2020. As at March 31, 2020, total assets amounted $78.49 billion (2020: $48.66 billion), a $29.83 billion improvement year over year.

The growth was as a result of ‘Pledged Assets’ which increased by $25.67 billion to a total of $47.18 billion (2020: $21.52 billion) and ‘Loan Receivables’ which rose by $6.19 billion to $7.29 billion (2020: $1.10 billion).