JAMAICA Money Market Brokers Limited (JMMB) recorded an EPS of J$0.76 for the financial year’s ended March 31, 2011, a 13.4 per cent growth over last year earnings of J$0.67. The holders of the ordinary stock units are entitled to receive a final dividend payment of J$0.10 on June 28, 2011.

For the year, JMMB’s Interest Income fell 27.8 per cent to J$8.8 billion. Similarly, Interest Expense moved to J$6.3 billion, 38.9 per cent below 2010. Overall, Net Interest Income moved up 32.4 per cent to $J2.5 billion as the fall in Interest Expense was more than enough to offset the lower Interest Income. The Net Interest Income margin moved from 15.6 per cent for FY 2010 to 28.6 per cent.

The increase in JMMB’s top line was complemented by growth in almost all areas of Non-Interest Income. In particular, the Group reported a 55.2 per cent improvement in its Fees and Commission Income. For Gains on securities trading income, there was a 28.2 per cent gain over the prior year. Foreign Exchange margins from cambio trading also advanced, moving from J$107.0 million in FY 2010 to J$156.7 million. Fees earned on managing funds on behalf of clients was down for the year to J$50.4 million.

The Group’s Operating Expenses moved up 22.6 per cent from J$2.1 billion to J$2.6 billion year-on-year. Staff cost climbed 24.7 per cent for the year to J$1.3 billion, while Other expenses was up by 20.7 per cent over 2010.

Despite an escalation in expenses, JMMB recorded an increase of 51.0 per cent over 2010 in its Operating Profit. The Operating Profit margin moved from 8.2 per cent in the last financial year to 17.2 per cent.

Profit before taxation was reported to be 46.8 per cent higher, moving from J$1.1 billion to J$1.5 billion. At the bottom-line, Profit for the year moved from J$986.4 million to J$1.1 billion.

Key to the sustainability of the rebound would be to maintain its current strategy on interest rates spreads. Over the last five years, the Group reported growth in its Net Interest Income including FY 2010, the period in which the Jamaica Debt Exchange was implemented. Other Income stream has given the Group a better balance performance and has been instrumental in the recovery. In the year ahead this contribution by Other Income would be crucial in ensuring growth stability.

Aggressive management of expenses would be crucial in the year ahead. In FY 2009/10, the Group benefited from cost management and efficiency initiatives undertaken as positive results stemmed from declining operating expenses of 14.1 per cent. The Group achieved this despite a reported headline inflation of 13.3 per cent. It is expected that future inflationary pressures may be subdued in light of weakening domestic demand and the relative stability of the exchange rates, so this may contribute positively to JMMB’s cost management strategies.

Between FY 2004 and FY 2008 JMMB traded at double digit valuations, with an average P/E of 14.6 times as Caribbean Money Market Brokers (CMMB) was part of the Group’s operations. In the last two years, post CMMB sale P/E valuations averaged 7.0 times, at a discount to the average P/E of companies listed in the finance sector in Jamaica