By Mark Kappart

JMMB continues to be impacted by high interest rates and elevated inflation, which saw it take another hit in the second quarter ended September 30.

For the period under review, JMMB Group posted operating revenue of J$11.70 billion, 6.0 per cent down on the same period last year. Net profit tumbled to J$1.9 billion. To put that into context, for the same period in 2022, JMMB posted a net profit of J$3.63 billion.

Of particular concern is that net interest income is down by 27 per cent to $4.15 billion.

Fees and commission income dropped by 13 per cent to $2.73 billion. FX trading gains are down 17 per cent to just J$1.34 billion.

Flashback to last year and it was a somewhat rosier picture. Net interest income declined by 2.0 per cent year-over-year, moving from J$5.82 billion to J$5.70 billion. Fees and commission grew by 25 per cent to J$3.14 billion, with FX gains increasing from J$1.22 billion to J$1.62 billion.

Apart from the constrictive operating environment, JMMB was also impacted by a downturn in Sagicor Financial Corporation’s results, where it has a 23.44 per cent stake. Sagicor’s performance has been hit by IFRS 17 and changes brought on by actuarial liabilities assumptions. The IMF had cautioned about the level of interconnectivity of Jamaica’s financial sector and the drag effect it might elicit.

Sagicor has proven to be a lifeline for JMMB in these turbulent times, contributing J$1.6 billion to its dwindling profits.

JMMB’s operating expenses for the second quarter ended September 30, 2023 jumped from J$9.96 billion to J$10.96 billion.

The high interest rate environment has reduced investment and trading opportunities but JMMB has been able to pivot to banking activities with a degree of success, with this business line contributing 59 per cent to total net revenue. Investment business came in with 38 per cent.

Keith Duncan, JMMB Group CEO, noted: “Although the current economic climate remains challenging for all players in the financial sector, the group has maintained credible performance, which is a testament to the company’s resilience and solid diversification model. Even as the group continues to monitor the global and domestic economic environments for potential risks, it will accelerate its strategies that are focused on enhancing efficiency and driving revenue generation, in line with its “Smart Growth” strategy. As such, the group is looking to roll out new solutions with a focus on payments and other digital solutions, based on their capital efficiency and the value-add that they will provide to clients. These solutions complement other recently launched solutions, namely the JMMB Money Transfer Visa Prepaid card, which was introduced in September, and digital assistant ‘Johanna’ that is now live on the JMMB Group – Jamaica’s website.

“The JMMB Group has the financial foundation to withstand the current challenging realities, and we remain focused on our strategic plan that will see us continually reassessing and re-imagining new opportunities to expand and grow our revenue and diversify our income stream; even as we seek to further strengthen our business model to remain resilient, in spite of whatever economic cycles that may impact us.”