VM Group to restructure, triple membership
New holding company awaits BOJ approval
Published:Sunday | May 30, 2021 | 12:08 AMNeville Graham - Business Reporter
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Victoria Mutual Group, VM, is gunning for one million members by 2025, which would triple its current base, as part of a wider programme to transform and grow the 143-year-old institution and its markets. The group’s ambitions were laid out to...
Victoria Mutual Group, VM, is gunning for one million members by 2025, which would triple its current base, as part of a wider programme to transform and grow the 143-year-old institution and its markets.
The group’s ambitions were laid out to members by President & CEO Courtney Campbell, who has just delivered one of the best financial performances for the institution during the pandemic but is already looking for ways to topple that record.
“We’re currently touching approximately 330,000 members, that is to say, persons who are actively saving, actively investing, who are on a pension plan, acquiring their own homes through VMBS or insuring through us. We believe that we can triple this number,” Campbell told the annual general meeting held virtually on Thursday.
Victoria Mutual Building Society, a mortgage bank, is the flagship operation, but VM also invests in wealth management and investment services, insurance, property services, pension fund management and online lending, and is in the process of building out a fintech unit.
The transformation programme laid out by Campbell on Thursday will see the group reorganising and creating a new mutual holding company in compliance with the Banking Services Act.
It requires the approval of the Bank of Jamaica, the regulator of banking institutions, with which the requisite paperwork was filed in March. Campbell said VM expects the BOJ to make its decision by mid-year.
In the meantime, Campbell says the company will be convening a special members’ meeting to provide greater detail of the group’s reorganisation and seek their approval for the plan.
Under the current structure, the group comprises subsidiaries VM Wealth Management, VM Property Services, VM Pensions Management, VM Investments, VM Money Transfer, VM Finance (UK), and affiliate company BCIC General Insurance, with Victoria Mutual Building Society playing the role of a holding company.
The Banking Services Act of 2014 requires that a financial holding company be established to hold all financial entities in a group separate from the deposit-taking or banking operation. VM’s restructuring should therefore see VMBS ceding its current role and becoming a subsidiary of the new holding company being created; as would the other businesses.
“The creation of this new structure will allow us to raise new capital, to enhance our resilience with a new business model,” Campbell told members.
Reporting on the group’s performance, Campbell said since 2016, when the society last put out its five-year growth targets, total assets had grown an average of about 14 per cent to nearly $252 billion in 2020; while loans had grown an average of 31 per cent to $77.68 billion.
At the same time, he said the group’s net surplus has grown an average of 52 per cent to $2.64 billion at the end of 2020. Campbell previously told the Financial Gleaner that last’s year’s profit was a record for the group.
He told VMBS members on Thursday that in order to top performance of the past five years, VM Group would be widening its suite of products and services and pitching them to Jamaicans in the diaspora.
Pointing to the establishment of the new fintech subsidiary VM Innovations in late 2020, Campbell says VM Group will be diversifying and upgrading strategic banking unit services while doing more work on its online facilities with an expansion of services beyond just individual members and clients to include businesses as a new target market.
“Many people still regard VM as a savings and mortgage institution. Yes, we do that, and do it well; but we also do so many other things very well, and we want people to recognise that,” Campbell said.
The group will be rolling out financial education initiatives and deepening member engagement with a member rewards programme, he added.
The broad transformation programme will see VM Group focusing on people-centred programmes, reorganising under the new holding company, diversifying products and services, recreating a more digitally focused operation and establishing cross-border alliances, growing membership and doing more transactions in Latin America and the Caribbean.
Achieving the group’s ‘ambitious’ targets by 2025 requires concentrated focus on the “triple bottom line of purpose, people and profits,” the VM president said.