Home' Trinidad and Tobago Guardian : June 27th 2013 Contents declined to J$1.7 billion from the
earlier result of J$2.78 billion.
Profits were further reduced due
to the combination of impairment
on both financial assets (J$74 mil-
lion) and intangible assets (J$107
Fortunately, the share of profits
from associated companies
improved to J$72.4 million from
J$30.3 million in 2012. As noted
earlier, the acquisition of CCFG
resulted in a gain of J$2.06 billion.
This was mainly because the value
of the assets acquired (J$6.7 billion)
was greater than the purchase price
of J$4.22 billion. The cost of pro-
fessional fees reduced the gross
profit on the transaction by J$423
JMMB was able to report a pre-
tax profit of J$3.65 billion. After
we add back a tax credit of J$209.5
million, the after-tax result was
J$3.86 billion. When we allocate
J$118 million to minority interests,
equity holders were left with J$3.74
billion. This compares with J$2.2
billion for the 2011/12 fiscal period.
For the 2013 period JMMB had
three major lines of business
whereas, in 2012, it reported fewer
than two major headings.
Financial and related services
include stock and securities bro-
kering, portfolio planning, funds
management and investment advi-
This division had segment assets
of J$168.1 billion and segment lia-
bilities of J$150.1 billion. During
the 2012/13 period, this grouping
generated external revenues of
J$11.5 billion and delivered profits
of J$1.66 billion.
This same segment had, in
2011/12, assets of J$141.3 billion
and liabilities of J$130 billion. In
that period, external revenues were
also J$11.5 billion, but profits came
in at J$2.77 billion. The major rea-
son for the reduction in profits in
2012/13 was the loss on the Gov-
ernment of Jamaica debt exchange
programme of J$754.3 million.
The banking and related services
division include the traditional
deposit taking and loan disburse-
ments activities as well as foreign
currency trading. This segment
had assets of J$21 billion in 2012/13
while its segment liabilities were
This division generated external
revenues of J$1.35 billion and con-
tributed profits of J$32.7 million.
In the previous financial year, there
was no such division.
The other segment includes
remittance and related services,
insurance services, investment and
real estate activities. Segment assets
in 2012/13 were J$808 million with
liabilities of J$744 million. With
external revenues of J$103.5 million,
its contributions to profits were
J$6.7 million. In the 2011/12 period,
this segment had assets of J$807
million and liabilities of J$768 mil-
lion. External revenues were
recorded at J$86 million while its
contribution to profits was J$16.1
Changes in financial
Consolidated total assets rose to
J$166.9 billion from 2012 s J$124.7
billion, or by 33.7 per cent. The
largest movement occurred in the
value of investment securities held;
this item closed 2013 at J$138.4
billion and was almost 28 per cent
more than the J$108.2 billion held
as at March 2012.
Of this total, J$91.7 billion relates
to government of Jamaica securi-
ties. A further J$10.6 billion was
classified as Jamaican government
guaranteed loans. Significant bal-
ances under the "available for sale"
category were also held in corporate
bonds (J$16.4 billion) and sovereign
bonds (J$17.4 billion).
The other notable asset was
loans and notes receivable. These
balances moved from J$3.38 billion
as at the end of 2012 to J$10.2 bil-
lion as at the end of March 2013.
Balances due from both corporate
entities and individuals showed
strong increases. In the case of
corporate accounts, these improved
from J$1.1 billion in 2012 to J$5.6
billion at the end of March 2013.
Though less robust, individual bal-
ances closed 2013 at J$5.1 billion
from the 2012 balance of J$2.4 bil-
The most significant liability
was securities sold under agree-
ments to repurchase. From the
2012 balance of J$107.6 billion this
item closed 2013 at J$135.9 billion.
The 2013 figure represents almost
91 per cent of the total liabilities
of J$149.6 billion. Of that total, 35
per cent was denominated in
Jamaican dollars; this amounted
to J$47.8 billion. The remainder
was denominated in non-Jamaican
currencies, principally Unites States
dollars (J$74 billion) and Dominican
Republic pesos (J$11 billion).
New for 2013, JMMB now had
liabilities relating to customer
deposits (J$7.6 billion), due to other
banks (J$378 million) and loan par-
ticipations (J$341 million).
Total equity, including non-con-
trolling interests, jumped from
J$10.87 billion as at March 2012 to
J$17.21 billion as at March 2013.
Due to the issue of new shares
for the purchases of CCFG, share
capital rose to J$1.85 billion from
the 2012 figure of J$368.8 million.
Also registering a strong increase
was the retained earnings reserve;
this balance closed 2013 at J$9.1
billion from the previous year s
J$8.2 billion. This reserve, which
is non-distributable, is calculated
by transferring 7 per cent of total
assets to this account; when com-
puting the capital adequacy ratio,
this balance is included.
The investment valuation reserve
climbed to J$1.7 billion from the
previous balance of J$402 million.
This figure captures the cumulative
net change in the values of avail-
able-for-sale financial assets until
such time that they become
impaired or derecognised.
The retained earnings figure
increased from 2012 s J$1.78 billion
to J$4.1 billion in the current peri-
od.On the Jamaican stock exchange,
JMMB s shares were recently quot-
ed at J$8.06 (approximately
TT$0.52). On the Trinidad
exchange, it was recently priced
at TT$0.50 (approximately J$7.75).
Since its acquisition, CCFG has
contributed J$1.25 billion to last
year s JMMB revenues and J$218
million to operating profits. The
process of integration and stream-
lining of this new subsidiary would
continue for some time.
Meanwhile, JMMB has
announced its intention to buy the
remaining 50 per cent of the local
bank, Intercommercial Bank Ltd
As at March 31, 2013, IBL had
total assets of TT$1.55 billion. The
equity portion represented
TT$108.9 million or seven per cent
of assets. Net profit attributable
to shareholders increased from
TT$4.5 million in 2012 to TT$10.16
million. IBL presently serves cus-
tomers from only four branches.
No doubt. JMMB, as full owner,
would want to increase this num-
To help deepen its presence
locally, JMMB might also be con-
sidering the purchase of a stock
brokerage firm. This would be con-
sistent with its plans to expand its
presence in Trinidad, the Domini-
can Republic and selected
Perhaps, it might also seek to
explore niche opportunities in
Guyana or Costa Rica?
Jamaica Money Market
Brokers Ltd (JMMB) oper-
ates in three main juris-
dictions, Jamaica, the
Dominican Republic and
T&T. Locally, its most vis-
ible arm is Intercommercial Bank Ltd.
It also owns JMMB Investments (T&T)
Ltd, which is engaged in securities bro-
Last June, the company acquired
93.14 per cent of Capital and Credit
Financial Group Ltd (CCFG); ownership
was increased to 100 per cent in August
2012. CCFG is also based in Jamaica.
For the fiscal year ended March 2013
JMMB delivered earnings per share of
J$2.35, which compares favourably with
J$1.51 recorded for 2012.
However, much of this improvement
was due to the gain on acquisition of
subsidiaries amounting to J$2.06 billion.
The acquisition of CCFG cost J$4.22
billion, comprising cash of J$2.74 billion
and issuance of 167,165,778 new JMMB
shares valued at J$1.48 billion. This
transaction increased the number of
issued shares to 1.63 billion.
Income and profit
Total interest income grew to J$11.25
billion from last year s J$9.17 billion or
by 22.8 per cent. The most significant
source of change was interest on invest-
ment securities, which increased by
21.5 per cent to J$9.93 billion from
J$8.18 billion in the 2011/12 period.
Also, loans and notes receivable rose
to J$682.4 million from J$345 million
in the earlier period.
On the other hand, interest expense
rose by a more modest 17.4 per cent
to J$6.6 billion from the 2012 figure of
J$5.6 billion. Not surprisingly, securities
sold under agreements to repurchase,
which comprise almost 91 per cent of
its liabilities, accounted for the bulk of
the interest paid.
These changes allowed it to report
net interest income of J$4.65 billion;
this was 31.3 per cent more than the
J$3.54 billion recorded for 2012.
Net gains on securities trading
declined to J$1.69 billion from J$2.04
billion earned in 2012. One of the biggest
changes was the loss of J$754.3 million
recorded on the Jamaican government
debt exchange programme. Fees from
managing funds on behalf of clients
rose to J$88.3 million; this was an
improvement of 123 per cent from the
2012 result of J$39.5 million.
Also recording a healthy change was
foreign exchange margins from cambio
trading; this item earned J$322 million,
registering a robust 128 per cent change
from the 2012 figure of J$141 million.
Total income for the year closed at
J$6.32 billion; this was an improvement
of J$318.4 million (5.3 per cent) over
the J$5.99 billion recorded for 2012.
Largely due to the acquisition of
CCFG, both staff costs and other
expenses rose to J$4.6 billion from last
period s J$3.2 billion.
On that basis, operating profit
JUNE 2013 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
STOCKS | BG15
JMMB focuses on acquisitions
intention to buy the
remaining 50 per
cent of the local
Bank Ltd (IBL).
As at March 31, 2013,
IBL had total assets
of TT$1.55 billion.
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