Sagicor Group Jamaica made J$6.61 billion in net profit attributable to shareholders for the nine months ended September 2024. 

This was despite the difficult economic climate and several one-off adjustments that materialised in the first quarter. For the third quarter alone, the group earned J$2.64 billion in shareholders’ profit.

President and CEO of Sagicor Group Jamaica Christopher Zacca, says despite the macroeconomic challenges, “a number of business lines continue to grow and lead the market”.

Insurance

Zacca says the group “continues to deliver on strong insurance sales, which is seen in continued growth in our insurance revenues”.

The segment brought in revenue of J$39.63 billion for the January to September 2024 period. This reflects a J$5.25 billion improvement compared to the same nine-month period in 2023. Both long-term and short-term insurance lines continue to experience strong new business sales.

 He declared “Sagicor has remained focused on improving service levels for its clients, while driving internal efficiencies”. These strategies resulted in meaningful growth in the group’s insurance revenues and net interest income over the prior year.

Commercial Banking

During the nine months, the Commercial Banking segment continued to show profitable expansion in its loan and card payment portfolios. For the January to September 2024 period,Sagicor Bank produced net profit of J$2.52 billion. That’s compared to J$2.14 billion for the same period last year, representing an 18% increase year over year. The performance was supported by a 13% increase in revenues, linked to greater transaction volumes on its card payments portfolios and growth in net interest income.

Sagicor Bank’s loan portfolios continue to grow, with J$30.64 billion in new loans written up to the end of September. For January to September 2023, new loans written were valued at J$26.15 billion. The loan portfolio quality has also improved on a year-over-year basis. This means more clients were consistent in their loan repayment, which lowers the risk of default. Deposit and other funding liabilities grew by $7.90 billion during the nine-month period, signalling strong consumer confidence in the Bank.

Investment Banking

Despite the high-interest rate environment which has some negative impact on investment banking, the segment has seen some improvement for Sagicor Group. There was an 8% increase in net investment income, which was valued at J$2.22 billion. The increase was mainly due to higher interest income and an improvement in market experience gains from securities trading.

Investment Banking recorded a net profit of J$593 million for the nine months ended September.For January to September 2023, the business line made a profit of J$802 million. Short-term funding rates remained high and contributed to an increase in the segment’s funding costs. Investment banking operations in the Cayman Islands continue to meet the group’s performance expectations.

Expenses

Sagicor Group’s expenses increased broadly in line with inflation. During the nine months, we continued to fund our investments in digital platforms and data security. This will strengthen the group’s competitive position in the medium term.

Outlook

Sagicor Group is confident it will continue to deliver high-quality service, increased efficiencies and consistent returns to shareholders. The group is also committed to digital transformation which will improve the experience of all stakeholders. With adjustments in both the U.S. Federal Reserve’s and the Bank of Jamaica’s policy interest rates, there should be some reduction in interest rates charged on domestic credit facilities. This could lead to growth-induced spending.

The BOJ projects headwinds for the near-term outlook on Jamaica’s economy, due to the impact of Hurricane Beryl and the negative influence of monetary policy on spending. The expectations for the 2024/25 fiscal year (which ends March next year) are however more favourable than previous forecasts.

Although the recent easing of interest rates is expected to have a positive impact, Sagicor Group maintains a conservative approach to managing liquidity and capital, while looking for strategic opportunities in markets that are beneficial to its stakeholders. The Group indicated in its release that it will continue to prioritise investments that will position the organisation for growth, as market conditions stabilise.