VM hits reset button after big 2023 loss
Published:Sunday | August 4, 2024 | 12:05 AM
Smarting from a loss of a near $375 million for financial year ended December 2023, financial conglomerate VM Group says it has hit the reset button.
VM Group Chairman Michael McMorris says the local financial sector was challenged while navigating the the central bank’s inflation-combating strategy of retaining a seven-per-cent policy rate since November 2022.
He told members at the company’s first annual general meeting as a reorganised group of companies that higher market interest rates facing deposit-taking institutions negatively impacted various lines of business, and dampened income particularly from lending solutions, as well as equity trading, which suffered because of a general negative trend in stock market movement.
“For the VM Group, the impact was no different, with a resulting negative outcome on our financial performance. During this review period, the VM Group’s net loss was $374.66 million, reflecting a worsened position relative to the previous year,” McMorris said.
The chairman said the VM Group has embarked on a programme to turn around the company’s fortunes. The programme, dubbed ‘Reset and Rise’, is aimed at capitalising on growth opportunities served up by restructuring the company.
Pointing to increases in total loans, deposits and assets by $10.54 billion, $8.12 billion and $15.44 billion, respectively, McMorris said the foundation work has set up the group for a return to strong profits in the near term.
Supporting the chairman, president and CEO Courtney Campbell told members that VM had been transformed into a diversified and integrated group, with eight financial services subsidiaries and three financial service associate companies. On the non-financial side, there are three companies, plus the VM Foundation.
With this structure, VM is positioned as a full-service organisation, offering saving and deposit products for personal and business investment, pensions services, and personal and business loans, Campbell noted, adding that VM is now beyond the point of being seen only as a mortgage institution.
VM Group operates in seven territories, namely, Jamaica, the United Kingdom, Florida and New York in the United States, Turks and Caicos Islands, Barbados and Trinidad & Tobago.
Campbell said the company leveraged its new structure to raise more than $11 billion in preference shares, providing it with flexibility to pursue new growth initiatives. He added, however, that within the current interest rate environment, the group faced higher costs to service the debt.
Campbell assured members that based on the performance of the various business units in the VM Group, the company was on the right trajectory for a return to overall profitability.