JMMB Group starts business in Barbados

Financial conglomerate JMMB Group Limited has grown its country network to four operational territories with the addition of Barbados.

The diversification across countries and business lines, management said, was a key factor in the group’s ability to sustain its operations in adverse market conditions.

“We are continuing our expansion in new territories and now licensed to operate as a securities dealer in Barbados as JMMB International Limited,” said JMMB Group CEO Keith Duncan during an earnings call on Thursday.

The Barbados operation launched into business in October under the leadership of Tricia Kissoon as CEO and Michael Jordan as executive director and head of business development.

The company now offers financial services in that country in addition to Jamaica, Trinidad & Tobago, and the Dominican Republic. Barbados is not a new market for the JMMB Group, but the launch of JMMB International marks its entry at a direct operational level. Its previous involvement was through Caribbean Market Brokers Limited, which was majority owned by CL Financial, a failed Trinidad conglomerate. CMMB was formed in 1999 as a joint venture between JMMB and Clico Investment Bank, with Clico and CL Financial holding management control of the brokerage house. JMMB held a 45 per cent stake in CMMB, which it sold to CL Financial in 2008 for about $3 billion at the time.

Otherwise, JMMB Group is currently invested in Sagicor Financial, whose headquarters remains in Barbados although the insurance conglomerate was taken over by Canada-based equity investors and is now listed on the Toronto Stock Exchange.

“Barbados is an evolving market and we have been there before with CMMB. We are now looking to return to that market because it makes sense to us, because we can leverage our Trinidad business line to get the efficiencies in Trinidad and Barbados without putting significant resources,” said Duncan. “We think we can get market share in Barbados, and think it is a critical market. There are good things happening there,” he said.

Growth forecast

Barbados economy should grow at 4.5 per cent in 2023 after a 13.8 per cent rebound in 2022, according to the latest International Monetary Fund forecast. Additionally, inflation has fallen to 4.3 per cent as of mid-2023, from a peak of 6.7 per cent recorded in May 2022, the IMF said.

The population of Barbados spans about 280,000 persons or about one-tenth of Jamaica’s population, but they each earn about US$20,000 per annum, or multiples of the average Jamaican.

Duncan said JMMB Group is hunting other markets and continues to eye opportunities for entry in Costa Rica, often seen by local businesses as an entry point into Central America.

“Central America has always been in our sights and our strategy,” he said about the Spanish-speaking market. “DR was supposed to be our entry point” to “leap over into Central America,” he added. “We continue to evaluate opportunities.”

Last year, JMMB announced the addition of a new branch in Jamaica and another in the Dominican Republic, saying it was reinvesting in the business despite uncertainty within the wider markets and economy.

Global shocks from the pandemic and war in Europe over the past three years have taken their toll on markets and financial companies.

And JMMB, a $688-billion business by assets, is still feeling the effects.

In the September quarter, despite growth in revenue to $9.7 billion, the financial conglomerate, which is into commercial banking, investment and investment banking, and insurance brokerage, recorded a net loss of $633 million. The loss primarily came from its investment business.

Duncan said high interest rates and market volatility limit the opportunities for gains on trading and investments.

“Sagicor Financial however has acted as a hedge,” said Duncan, while noting that high interest rates benefit banking and insurance, while investment banking and trading suffer with increased volatility.

Sagicor Financial contributed $1.61 billion to profit over six months. Total profit for the group in the half year was $1.9 billion.

The JMMB International operation is a greenfield business, with services targeted at corporate and high net worth clients. Its offerings include an online international brokerage service branded as JMMB International Access, in addition securities dealing and capital markets solutions.

JMMB Group once traded on the Barbados Stock Exchange but exited that market in 2018, citing thin trading of the stock.

“There is no decision at this time to relist JMMB Group on the Barbados Stock Exchange; however, before such a recommendation is made to the board of directors, the team would need to assess the activity in the Barbados market, having delisted in 2018 due to regulatory cost and a lack of trading activity in that market,” said Chief Compliance Officer and Company Secretary Carolyn DaCosta.

steven.jackson@gleanerjm.com