Caribbean Information and Credit Rating Services Limited (CariCRIS), in a statement issued last month, upgraded JMMB Group Limited’s corporate credit ratings to CariA- (Regional Local Currency) and CariBBB+ (Regional Foreign Currency) and jmAA- (Local Currency Rating) and jmA+ (Foreign Currency Rating) on the Jamaica national scale.

The national scale ratings indicate ‘high creditworthiness’ of JMMB Group compared to other obligors in Jamaica. At the same time, on the regional scale ratings, JM­­­MB Group has been assigned a ‘good level of creditworthiness’ in relation to other obligors in the Caribbean.

In its statement, CariCRIS further outlined: “It’s one notch uplift of the ratings of JMMBGL (from 2021) is based primarily on a notable improvement in the Group’s financial risk profile over the last three years. This improvement has been supported by the Group’s growing earning asset base and strategic investment in Sagicor Financial Company Limited (SFC) which drove its profitable growth over the last three years averaging 49.2 per cent. Notably, the Group reported its most profitable year of operations in its history,” boasting J$12 billion in profit for the 2021-2022 financial year.

Additionally, the rating agency pointed to the Group’s regional expansion and diversification strategy as a positive move that will enhance its business risk profile.

In August, JMMBGL announced the acquisition and merger of Banco Múltiple Bell Bank, SA, a commercial bank domiciled in the Dominican Republic, which is expected to improve its market position over the long-term.

CariCRIS has also assigned a stable outlook on the ratings.

“(This) outlook is based on our expectation that the Group will continue to reap the positive benefits to be derived through its 23.29 per cent stake in Sagicor Financial Company Limited (SFC). Additionally, the Group will continue to implement measures geared towards standardising and integrating its regional operations, which is expected to support its growth and improved operating efficiencies,” said the statement.

The ratings of the Group reflect its strong brand equity and long history of operations in the Jamaican securities industry. This brand equity has facilitated the Group’s expansion into the wider Caribbean region and has positioned it as an emerging player. Additionally, JMMBGL’s well-diversified asset portfolio, characterised by good asset quality and strong financial performance, also support the ratings. Further, the Group continues to report good capital adequacy ratios, as well as a robust governance structure and risk management practices.

In reacting to the rating, Keith Duncan, JMMB Group CEO, shared: “We are proud that the solid performance that we have been able to achieve and value, created by the build-out of our regional diversification strategy, has been underscored by this independent analysis. As we celebrate our 30th anniversary, we are humbled by what we have achieved as a team through continued client partnership and innovative solutions, while remaining true to our vision of love.”

The rating agency cautioned that these rating strengths are tempered by prevailing economic conditions in operating territories that could constrain growth.

Additionally, the Group’s funding base, which is characterised by moderate concentration in repurchase agreements (repo) instruments, has contributed to assets/liabilities mismatches.