39% jump in JMMB’s Q3 profit

JMMB Group enjoyed a strong third quarter, with profit after tax jumping sharply by 39 percent, to $871 million from $628 million in 2016 and earnings per share of 53 cents, from a rise in revenues, net of interest cost of 24 percent to $4.5 billion.
Interest margins slipped in the quarter year over year, from 52 percent to 49 percent but was better than the year to date performance of 48 and 47 percent respectively. Fees and commission income jumped an impressive 71 percent to $512 million in the quarter and 53 percent in the nine months, over the similar period in 2016 with significant growth in managed funds and collective investment schemes across the Group. Gains on securities trading climbed 42 percent in the December quarter and just 5 percent for the year to date, over 2016. Foreign exchange gains were up 43 percent for the quarter but down 4 percent for the nine months.
The group posted net profit of $2.58 billion and earnings per share of $1.56 for the nine months to December, while generating 11 percent increase in net operating revenue to $12.28 billion, resulting from increases in net interest income, trading gains, fees and commission income.
Net interest income, grew 12 percent or $594 million to $5.66 billion, flowing from strong growth in the loan and investment portfolios. Financial and Related Services continued to be the leading contributor to net operating revenue with 67 percent at $8.23 billion which is 11 percent more than the $7.4 billion generated in the similar period in 2016. This improvement was due mainly to growth in trading gains, asset management fees as well as net interest income. The Banking performance of $3.86 billion reflected a 10 percent increase, up from $3.52 billion and resulted from strong growth in the loan book which translated into net interest income and fee income.
Administrative Expenses climbed 13 percent in the quarter and 14 percent year to date over 2016, slower than the growth in revenues for the quarter but faster than revenues year to date.
“Jamaica’s focus remained on operationalizing our commercial bank and maximizing our cross-selling efforts across the Group. Accordingly, growth in both the loan book and our off balance sheet offerings continued to improve.” Archibald Campbell, Chairman and Keith P. Duncan, Group Chief Executive Officer stated in their comments on the quarterly.
At the end of the reporting period, the JMMB Group’s asset base totalled $271 billion, up $19 billion or 8 percent relative to the start of the financial year. This was mainly on account of higher cash holdings as well as larger loan and investment portfolios. The investment portfolio increased by $9.6 billion or 6 percent to J$182 billion, while net loans and advances grew by $6.57 billion or 14 percent to $53.7 billion. The total invested in off-balance sheet products as at the end of December 2017 stood at $117.9 billion compared to $107.64 billion as at end of December 2016.
IC Insider.com projects earnings of $2.75 for the full year. The stock last traded on the Jamaica Stock Exchange at $25 for a PE of 9.