Price appreciations for strategic stocks credited for the rise in income during the period
Mayberry Group recorded significant growth in total comprehensive income of $2.4 billion for the second quarter of 2021 when compared to the similar period in 2020.
This is attributable to the increase in financial reserves following price appreciations for strategic stocks held in the equity investment portfolios as at June 30, 2021. The group also recorded net profit of $67.2 million for the second quarter compared to a loss of $4 million for the corresponding period in 2020.
This performance continues to reflect signs of investor confidence returning to the local financial market. For Q2 2021, net interest income and other revenues grew by 46 per cent.
Performance affected by lower dividend income
However, the performance was somewhat modulated by lower dividend income, reduced foreign exchange gains and fees and commissions over the comparative period. Fees and commissions were lower than that of the corresponding quarter in 2020, due to the timing associated with 2021 deals in the pipeline which are projected for later in the year.
Net profit attributable to shareholders was $11 million for Q2 2021, compared to $8.9 million in the prior year, resulting in earnings per share (EPS) of $0.009 for Q2 2021 (Q2 2020: $0.007). Revenue lines that experienced growth during the quarter were as follows:
• Interest income of $199 million increased by $6.3 million, Q2 2021 over Q2 2020. This movement resulted from increased revenue on repurchase agreements and the strong take up on customer loans
• Overall net trading gains were higher by $86.5 million, mainly attributed to trading on the bond portfolio
• Unrealised gain on investment revaluation of J$237 million for Q2 2021 increased by $299.7 million. This mainly resulted from the revaluation of all equities classified as fair value through Profit or Loss (FVPL), on the subsidiary company, Mayberry Jamaican Equities Limited (MJE).
Conversely, the following revenues declined:
• Fees and commission income of $76 million for April to June 2021 was lower by 34 per cent over the corresponding period in 2020, however, growth in revenues for this segment is expected to accelerate for the remaining two quarters in the year
• Dividend income of $85 million decreased by $164 million for Q2 2021 over Q2 2020 reflecting overall higher payouts in 2020
• Net foreign exchange gains of $34 million in Q2 2021 decreased by $12 million over Q2 2020 due mainly to unrealized foreign exchange losses booked during the quarter.
The cambio business recorded revenues of $87 million, which was $9.3 million lower when compared to the corresponding quarter in 2020. Operating expenses for Q2 2021 increased by $106.8 million, moving from $352.5 million in Q2 2020 to $459.3 million in the current period under review.
The increase was driven by higher expenditure in core support areas of the business, namely computer licensing fees, management fees, sales and marketing, donations, insurance and IT consulting fees.
Assets & liabilities
Total assets as of June 30, 2021 amounted to $34.7 billion compared to $27.9 billion for the corresponding period ended June 30, 2020. The increase in asset balances was primarily due to an increase in investment securities of $4.1 billion, reverse repurchase agreements of $833 million and promissory notes of $209 million.
The positive movement in asset balances also reflected an increase in loans and other receivables of $1.4 billion and other assets of $542 million. Total liabilities at June 30, 2021 for the group, were $16.2 billion, an increase of $1.1 billion or seven per cent over the 2020 corresponding period, driven mainly by growth in securities sold under repurchase agreements.
Mayberry Group’s capital base showed significant growth with total shareholders’ equity of $18.6 billion at the end of June 30, 2021 compared to $12.8 billion for the prior period in 2020. The year-on-year increase of $5.8 billion was driven by the increase in fair value reserves and retained earnings.
Mayberry’s capital base continues to be robust and compliant with our regulatory benchmarks. The Q2 2021 capital to risk-weighted asset ratio of 21.7 per cent improved from 17.6 per cent for Q2 2020 and complied with the established minimum of 10 per cent set by the Financial Services Commission (FSC).
In addition, our tier one capital is 98 per cent of the overall capital of the Company and exceeds the regulatory minimum of 50 per cent established by the FSC.