JMMBGL reports 34% increase in six months net profit attributable to the shareholders

Date: November 15, 2019

JMMB Group Limited – (JMMBGL) for the six months ended September 30, 2019, booked net interest income of $4.63 billion compared to $4.35 billion in 2018, an increase of 6%. Of this, interest income grew by 10% to close at $9.58 billion, from the $8.67 billion booked in 2018, while interest expenses increased by 15% to total $4.95 billion relative to $4.32 billion in the prior year. Net interest income for the quarter improved 7% to close at $2.43 billion relative to $2.28 billion a year earlier.

Fees and commission income for the period amounted to $1.59 billion, an improvement of 33% on the $1.19 billion recorded for 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 20% year over year to close the period at $1.53 billion (2018: $1.27 billion) due to “increased trading volume and growth in regional markets”. While net gains from securities trading showed an increase of 58% totalling $3.95 billion (2018: $2.50 billion). Dividend income for the period rose 138% to close at $21.19 million (2018: $8.91 million).

Operating revenue net of interest expense for the six months improved 26% to $11.71 billion versus $9.32 billion in 2018. For the quarter, operating revenue net of interest expense also increase 26% to close at $5.87 billion in contrast to the $4.66 billion recorded in 2018.

JMMBGL recorded an impairment loss on financial assets of $295.27 million, 72% up from the $172.05 million booked for the same period in 2018.

Operating expenses amounted to $7.70 billion, a year over year growth of 18% (2018: $6.55 billion) which led to an operating profit of $4.01 billion, an increase when compared to the $2.78 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 63% compared to 68% 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.”

Other income booked for the period declined 99% to $216,000 relative to a total $28.63 million reported for the corresponding period in 2018. As such, the JMMBGL booked profit before taxation of $4.01 billion for the period, 43% higher than the $2.80 billion recorded in 2018.

Following taxes of $1.21 billion (2018: $731.39 million), JMMBGL booked a 35% increase in net profit to $2.80 billion compared to $2.07 billion reported for the similar period of 2018. Net profit for the quarter totalled $1.68 billion, a 51% increase compared to $1.12 billion recorded in 2018.

Net profit attributable to the shareholders of the company totalled $2.72 billion relative to $2.03 billion in 2018, a 34% improvement year over year. Net profit attributable to the shareholders of the company for the quarter totalled $1.61 billion, 47% higher than $1.1 billion in 2018.

As a result, earnings per share (EPS) for the six months amounted to $1.67 (2018: $1.25), while for the EPS for the quarter was $0.99 (2018: $0.67).The twelve month trailing EPS amounted to $2.77 where the number of shares used in the calculations amounted to 1,630,552,530 units. Notably, JMMBGL’s stock price closed trading on November 14, 2019 at $42.86.

The Company noted, “During the next half of the financial year, we will be executing on the following strategic initiatives:

    • The launch of Visa debit card services in Jamaica in the third quarter of the financial year
    • Standardization of our core banking system across the Group
    • The official launch of our ‘SME Resource Center’ as part of our commitment to deepen partnership with Small and Medium Enterprises in Jamaica
    •  The launch of private equity funds and additional structured product solutions”

Balance Sheet at a glance:

Total assets as at September 30, 2019 amounted to $391.68 billion relative to $324.17 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. Both the investment portfolio as well as loans and notes receivable grew by 22% to J$252.07 billion and J$82.94 billion, respectively. The credit quality of the loan portfolio continued to be comparable to international standards.”

Shareholders’ equity totalled $37.47 billion (2018: $26.68 billion). As a result, book value per share stood at $22.98 (2018: $16.36).

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