Elevated interest rates and soft liquidity continue to impact some of Jamaica’s largest corporations and Sagicor Group Jamaica is no exception.

For the six-month period ended June 2024, Sagicor Group Jamaica recorded a net profit attributable to shareholders of J$3.98 billion, J$1.62 billion less than the J$5.60 billion recorded for the same period last year. 

Nevertheless, net interest income grew by 17 per cent. The group’s total assets grew by 5 per cent to $569.31 billion while total assets under management came in at just over $1 trillion, 9 per cent higher than the figure recorded for the prior year. Earnings Per Share (EPS) dropped by 29 per cent at $1.02 from the $1.43 posted for the second quarter ended June 2023. Market capitalisation also fell to $160 billion from $191.34 billion last year, a 16 per cent drop. 

Stockholders’ equity climbed by 8 per cent to $98.53 billion, from the $91.64 billion posted for the same period last year.

Sagicor’s leading business line insurance performed admirably registering year-over-year growth of $3.53 billion with both long-term and short-term insurance lines seeing a significant uptick in new business sales. For the period under review, insurance revenues were up by 16 per cent. 

The Long Term Insurance line, headed by Mark Chisholm did well, recovering from costly actuarial modelling refinements in the first quarter of 2024. The Contractual Service Margin (CSM) of  $2.91 billion was an improvement on last year’s $2.50 billion, up by 16 per cent.

The Short-Term Insurance line (contract boundaries of less than one year) weighed in with revenues of  $16.16 billion generating a net profit of $0.86 billion. This compares favourably with the $13.64 billion posted last year which generated a net profit of $0.04 billion last year. Of particular note, this line drummed up new business sales of $1.50 billion, more so with health and life products. Sagicor has had to contend with increases in drug prices and medical costs across the globe thus impacting its revenues from its health insurance business. 

Sagicor’s commercial banking arm continues to improve despite a restrictive environment. It sits as the number three player in Jamaica and is looking to close the gap on the two leaders, Scotia and NCB. For the six-month period, revenues were up by 15 per cent with net profit coming in at $1.42 billion. Sagicor’s loan book has grown with new loans of $22.14 billion a testament to the growing popularity of the bank whose marketing efforts have been laudable. Deposit and other funding liabilities grew by $7.86 billion during the period under review. Interest income increased by $0.92 billion

Investment banking’s net profit came in at $0.41 billion compared with $0.34 billion for the six-moth period of 2023. Gains from securities trading and higher interest income saw net investment income increase by 37 per cent to $1.61 billion. Sagicor Investments also oversaw the successful IPO of pharmaceutical company R.A. Williams.

Speaking at a media briefing at its headquarters in New Kingston on Thursday, August 15, Sagicor Group Jamaica’s CEO Christopher Zacca said: “This is an improved performance on the first quarter of this year and gives us confidence for the rest of the year as our core business is strong. The macro environment is still very difficult. Interest rates continue to be at an elevated rate and liquidity is a bit soft in the market. Our life insurance business performed strongly so too did our commercial banking business. Our investment banking arm remains a bit troubled by the environment but is doing better than last year and we are grateful to the team for that.”

Zacca added: “In July, we had a successful IPO. Our new e-Invest platform performed seamlessly which is the updated and upgraded platform allowing us to offer a digital solution in terms of IPOS and APOs. We opened our first ‘Figital’ branch which is both face-to-face, as well as digital in New Brunswick, Spanish Town.

“We remain cautious. We do run scenarios, what ifs. We do believe that a reduction in interest rates will be generally positive for the group. It would aid investment banking, and so, to our commercial banking side. With insurance, where we see the benefit of a lower rate is in terms of economic activity which we are a little bit concerned about, looking at the market right now. We should see stronger sales as a result of lower interest rates.”