6 months ago
37
Financial conglomerate JMMB Group Limited, JMMBGL, cites global uncertainty as the latest challenge.
“We are in uncertain times,” said Group CEO Keith Duncan during an investor briefing on Monday, while citing the ‘tariff wars’ initiated by United States President Donald Trump.
“I do not think anyone has a clear picture of where things are going, how they will play out, or whether it will be inflationary,” he said.
Central banks worldwide have been adjusting interest rates to manage inflation since the pandemic. Initially, there were a series of rate hikes, but interest rates have been coming down as inflation cooled.
In January, the US Federal Reserve held interest rates steady amid a shifting global landscape; as did the central bank in the Dominican Republic, which is one of the three markets in which JMMB Group operates.
The Bank of Jamaica, BOJ, which cut rates four times last year to its current level, 6.0 per cent, will issue its next decision on Thursday, February 20.
“It will be interesting to see what the BOJ does at its next sitting,” said Duncan.
“It is very important for the cost of money, our margins, and how we go forward,” he said regarding the rates set by the central bank, which peaked at 7.0 per cent in the series of rate hikes executed by the BOJ post-pandemic.
High interest rates have made the capital markets volatile and led to losses for the group. To offset uncertainty, JMMBGL wants to grow core revenue while cutting costs. The group operates wealth management and banking services.
The Bank of Jamaica’s December 2024 Inflation Survey indicated a wait-and-see approach, with nearly two-thirds of all respondents expecting the policy rate to remain unchanged over the next three months. Within the financial sector, over 90 per cent of respondents in that subset expect the rate to either stay the same or decrease marginally.
For the December 2024 quarter, JMMB Group reported earnings of $1.1 billion, down from $15 billion in the 2023 period, when the company’s bottom line was fattened by a one-off gain relating to the acquisition of Canadian insurer Ivari by JMMBGL’s associate company Sagicor Financial.
Over the years, JMMBGL has grown revenue through regional expansion. For the latest quarter, Jamaica contributed 50 per cent of earnings, Dominican Republic 21 per cent, Trinidad & Tobago 17 per cent, and Barbados 8.0 per cent.
“We have to drive core revenues”, which is, “critical to maintaining stability of earnings,” Duncan said amid optimism for the business. “We know we are coming out of a difficult environment, but we expect the [growth] trajectory to continue,” he said.
English (US) ·