Home' Trinidad and Tobago Guardian : September 7th 2014 Contents SEPTEMBER 7 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG15
Jamaica Money Market Brokers
Ltd s local subsidiaries include
the Intercommercial Bank Ltd, its
subsidiary, Intercommercial Trust
& Merchant Bank Ltd and, since
April 2014, AIC Securities Ltd.
Excluding AIC Securities, the Trinidad-
based operations generated net operating rev-
enues of TT$50.53 million and after-tax profits
of TT$27.26 million for the year ended March
Next, we will look at its first quarter results
and then conclude with JMMB Group Ltd s
growth plans for its three major markets,
Jamaica, T&T and the Dominican Republic.
Increase in asset values
The notable increase in assets under the
banking segment to J$59.5 billion was due to
the completion of the purchase of the remain-
ing 50 per cent of Intercommercial Bank and
its subsidiary, Intercommercial Trust & Mer-
chant Bank Ltd in October 2013. This acqui-
sition cost JMMB US$8.75 million.
In the case of the financial services segment,
assets climbed by 5.7 per cent to J$182.5 billion
from J$172.6 billion a year earlier.
At the company level, cash and equivalents
increased from J$8.96 billion last June to J$28.4
billion as at June 2014. Similarly, net loans
and notes receivable advanced to J$28 billion
from J$12 billion on June 2013.
In a similar vein, plant, property and equip-
ment and intangible assets moved from J$1.84
billion to J$2.91 billion. Also exhibiting a sig-
nificant change was acceptances, guarantees
and letters of credit, which closed at June 2014
at J$361.5 million from J$11.3 million a year
Resulting from the acquisition of the IBL
Group, customers deposits jumped to J$37.48
billion from J$9.17 billion as at the end of the
While there are no longer any loan partic-
ipation balances, there is a new loans payable
of J$1.402 billion. In addition, sums due under
the redeemable preference shares line rose
from J$2.76 billion on June 2013 to J$4.23
billion as at June 2014.
This increase was due to the issue of two
tranches of new redeemable preference shares.
The larger portion of 715,482,000 units with
a coupon rate of 7.5 per cent, was sold at
J$2.00 each; the second batch, comprising
15,358,000 units at 7.25 per cent, was sold at
All applications were allotted in full.
Rise in shareholders' equity
Shareholders equity expanded from the
March 2014 figure of J$18.33 billion to J$18.98
billion as at June 30, 2014.
The retained earnings component was
boosted by current period profit of J$558 million
and reduced by dividends paid of J$277.2 mil-
With 1,630,552,530 shares outstanding, the
book value of each share appreciated from
J$11.25 last March to J$11.64 as at June 2014.
This value is much greater than its recently
traded price of J$7.00 (about TT$0.45).
For the three months ended June 2014,
JMMB reported total revenues of J$2.4 billion;
this showed an improvement of 16.1 per cent
over the J$2.06 billion delivered for the com-
parative period in 2013.
Net interest income advanced by 9.5 per
cent to reach J$1.29 billion from J$1.18 billion
in the comparative 2013 first quarter.
Fees and commission income posted a strong
32.1 per cent improvement, moving from
J$136.75 million in 2013 to J$103.5 million in
the first quarter of 2014.
Net gains on securities trading increased by
12.4 per cent to J$757.3 million from J$673.5
million in the first quarter of 2013.
Foreign exchange margins from cambio trad-
ing registered at J$213.4 million; this showed
an improvement of 95.5 per cent over the
J$109.1 million reported for the comparative
period in 2013.
Operating expenses posted a 52.5 per cent
increase, rising from J$1.13 billion last year to
J$1.72 billion in the first quarter of 2014/15
fiscal period. This increase of J$590 million
is divided into two main portions: J$323 million
was generated by the newly acquired IBL group
in Trinidad, while the remaining J$267 million
reflected integration costs, growth in sub-
sidiaries and normal inflationary increases.
In the 2013 period, the IBL group sustained
a loss of J$25.54 million due principally to
increased loan provisioning costs.
In the current period s first quarter, the
completion of the purchase of AIC Securities
Ltd on April 30, 2014 generated a gain on
acquisition of J$9.68 million. This was because
the purchase price of J$92.7 million (TT$5.36
million) was less than the acquired assets of
J$102.4 million. For the first quarter, AIC did
not contribute any revenues to the group.
Overall, profits attributable to shareholders
declined to J$558 million from J$753.5 million
a year earlier. This result saw EPS contract to
J$0.34 from J$0.46 in the 2013 period.
Both major operating segments generated
higher revenues, but recorded lower levels of
At the financial services division, revenues
advanced by 7.5 per cent while segment profits
tumbled by almost 27 per cent.
At the banking services division, a robust
84 per cent increase in revenues was accom-
panied by a 31 per cent contraction in pre-
tax profits. Additional, hopefully non-recurring,
costs attributable to IBL have distorted this
quarter s results.
Full-year dividends for the fiscal period
ended March 2013 were J$0.23. For the 2014
fiscal year, this payment increased to J$0.33.
This increase was implemented despite a fall
in EPS from J$2.35 in 2013 to J$1.74 in 2014.
Based on a recent price of J$7.00 and assum-
ing that the 2014 dividend of J$0.33 is main-
tained, the share gives investors a handsome
yield of 4.7 per cent.
Recent fundraising events
The company reports that it has exceeded
the Jamaican Financial Services Commission s
benchmarks for capital to risk-based assets
and capital to total assets. Despite this assertion,
it has, on two occasions in less than a one-
year period, gone to the capital and other mar-
kets for additional funds.
On August 2013, it raised additional
redeemable preference shares amounting to
J$1.47 billion at rates of 7.5 and 7.25 per cent.
Although classified as a liability, these instru-
ments give their holders voting rights. Ordinary
shareholders were allowed to participate in
this fund-raising exercise via a rights issue.
On July 18, 2014, JMMB raised US$20 million
(approximately J$2 billion) via a private place-
ment of unsecured extendible notes. These
notes were denominated in United States dollar
and participation was restricted to Jamaican
residents. Some non-Jamaican shareholders
were miffed at being excluded from this financ-
These instruments will pay annual interest
of 6.75 per cent until July 18, 2016. Investors
who extend the maturity to July 18, 2019 will
be paid at the rate of 7.75 per cent for the next
Among the allocations for these fresh funds
was probably the settlement of the loans
payable balance of J$1.402 billion and a Credit
and Capital Financial Group 7.0 per cent prom-
issory note for J$75.5 million, which was due
on August 30, 2014.
With more stable funds in place, JMMB can
better plan its future course.
The September special meeting
JMMB has scheduled a special shareholders
meeting for September 17, 2014 to be held one
hour prior to its regular AGM.
One of the main purposes of this meeting is
to approve a "scheme of arrangement" that
would allow a new company, JMMB Group Ltd
to become the holding company of the group.
In order to effect this change, the 1.63 billion
issued shares of JMMB Ltd will be cancelled
and shareholders will receive shares of equal
amount in the successor entity, JMMB Group
The shares in the successor company will
then be listed on the stock exchanges of Jamaica,
Barbados and T&T.
The primary purpose of this transaction is
to facilitate the effective regulation of the various
subsidiaries by the Bank of Jamaica and other
Subsequently, JMMB Group Ltd will be
allowed to acquire direct ownership in the former
Credit and Capital Financial Group s subsidiaries,
including JMMB Merchant Bank Ltd; this change
will eliminate a cumbersome ownership layer.
In the final stage, CCFG will be liquidated.
After completing three acquisitions in two
years, and now in the final stages of streamlining
its ownership structure, the new JMMB Group
is set to roll-out its integrated financial services
business model. This will be done first in Jamaica,
followed by Trinidad and Tobago then in the
This move should also benefit its major share-
holders, which include NCB Capital Markets
(26.3 per cent), JMMB ESOP (9.7 per cent) and
Clico (6.3 per cent).
JMMB positions itself to develop
its three growth markets
Cash and equivalents
increased from J$8.96 billion
last June to J$28.4 billion as
at June 2014. Similarly, net
loans and notes receivable
advanced to J$28 billion from
J$12 billion on June 2013.
Links Archive September 6th 2014 September 8th 2014 Navigation Previous Page Next Page