JMMBGL reports 19% increase in first quarter net profit attributable to the shareholders

Date: August 15, 2019

JMMB Group Limited – (JMMBGL) for the three months ended June 30, 2019 booked Net interest income of $2.20 billion compared to $2.07 billion in 2018, an increase of 6%. Of this, Interest income grew by 8% to close at $4.60 billion, from the $4.24 billion booked in 2018, while interest expenses increased by 11% to total $2.40 billion relative to $2.17 billion in the prior year.

Fees and commission income for the quarter amounted to $736.67 million, an improvement of 53% on the $481.64 million last year’s corresponding period. According to the company, this was, “due to significant growth in managed funds and collective investment schemes across the Group.” Foreign exchange margins from cambio trading recorded an increase of 45% year over year to close the quarter at $744.67 million (2018: $514.65 million) “because of increased trading volume and growth in regional markets” while net gains from securities trading showed an increase of 35% totalling $2.16 billion (2018: $1.60 billion) “as change in the Fed’s outlook resulted in a rally in emerging market assets and by extension increased trading activities”. Dividend income for the three months also increased 9% to close at $5.00 million relative to $4.58 million in 2018’s first quarter.

Operating expenses amounted to $3.84 billion, a growth of 15% (2018: $3.34 billion). Notable other income declined 98% to $102,000 relative to $5.34 million the prior quarter. While the company booked impairment loss on financial assets of $153.27 million relative to a loss of $112.94 million the prior quarter.

This led to an operating profit of $1.85 billion, an increase of 52% when compared to the $1.21 billion booked the year prior. According to JMMBGL, “This growth was attributed primarily to continued expansion of commercial banking services in Jamaica and JMMB Express in Trinidad and Tobago as well as project related activities centred on process optimization. Nevertheless, the Group’s efficiency ratio improved to 66% compared to 72% in the prior period. The Group will continue to focus on extracting operational efficiency from all entities through the launch of its standardization and process improvements project.”

Following taxes of $727.78 million (2018: $258.88 million), JMMBGL booked a 17% increase in net profit to $1.12 billion compared to $956.61 million reported for the similar period of 2018.

Net profit attributable to the shareholders of the company totalled $1.11 billion relative to $935.90 million in 2018, a 19% improvement year over year.

As a result, earnings per share (EPS) for the three months amounted to $0.68 (2018: $0.57). The twelve-month trailing EPS amounted to $2.45 where the number of shares used in the calculations amounted to 1,630,552,530 units. Notably, JMMBGL’s stock price closed trading on August 14, 2019 at $49.79   

The Company noted, “The JMMB Group recorded strong growth in profitability for its first quarter ended June 30, 2019. This was attributable to the optimization of our financial partnership strategy as well as further enhancement of our client experience. The Group also implemented initiatives to enhance our sales strategy, thus enabling us to deepen relationships with our existing clients. Additionally, we continued to grow our client base especially in our less mature markets in the Dominican Republic and Trinidad & Tobago.”

Balance Sheet at a glance:

Total assets as at June 30, 2019 amounted to $351.39 billion relative to $314.69 billion in 2018.  According to JMMBGL, “This was mainly on account of a larger loan and investment portfolio as well as a higher cash balance. The investment portfolio increased by 7% to J$220.71 billion, while loans and advances grew by 8% to J$73.31 billion. The credit quality of the loan portfolio continued to be comparable to international standards.”

Shareholders’ equity totalled $32.79 billion (2018: $25.25 billion). As a result, book value per share stood at $20.11 (2018: $15.48).

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