JMMB’s profit declines 55 per cent
JAMAICA Money Market Brokers (JMMB) has recorded net profits of $286 million for the three months to December 2009 quarter, a decline of 55 per cent compared to the similar period in December 2008 when the group’s net profit stood at $635 million. As a result, earnings per stock unit also trended downward 53.48 per cent from $0.43 to $0.20 quarter on quarter.
The significant decline in net profits is in part due to the fact that at the end of the December 2008 quarter, JMMB realised a gain of $2.3 billion from the sale of its 45 per cent equity in the associate companies of Caribbean Money Market Brokers (CMMB) limited, CMMB Barbados and CMMB Securities limited. With the share of profits from this sale removed from the account along with the provision for impairment on the investment portfolio, JMMB’s operating profits declined 67 per cent from $831 million to $272 million over the corresponding three month quarters, December 2008 and 2009.
Other income streams contracted, with securities trading and foreign exchange gains declining 81 per cent from $1.15 billion at the December 2008 quarter, to $208 million as at the similar quarter 2009, along with fees and commissions, 28 per cent, and foreign exchange margins from cambio trading, 53 per cent.
However, Net Interest Income (NII) jumped to $545 million at the three months ended December 2009, 69 per cent over the corresponding three month period in 2008, when NII was $169 million. “The continued reduction in interest rates by the Central Bank, coupled with the strategic re-alignment of the Group’s portfolio, resulted in a favourable impact on the net interest income,” JMMB’s directors said in a statement to shareholders.
With the growth in NII coming months before the Jamaica Debt Exchange (JDX), the effect of the offer is not yet reflected in the financial results. According to directors however, JMMB’s JDX offer comprises five per cent or $35 billion of the $701 billion programme. “The projected impact on JMMB’s equity and profitability is minimal, with capital adequacy at 38.7 per cent, still far exceeding the Financial Services Commission’s 14 per cent requirement,” JMMB’s directors said.