By Al Edwards, Business Co-ordinatorTHE country's leading building society, Jamaica National Building Society (JNBS), posted positive results for the year ended March 31, 2003 despite a challenging business environment characterised by exchange rate instability, rising inflation and fluctuating interest rates.
The Group's assets grew to $34.75 billion up from last year's figure of $28.78 billion, while the building society itself registered assets of $26.97 billion. This now means that JNBS ranks fourth in terms of total assets and capital reserves (Group $5.35 billion, Society $4.16 billion) among local banks, building societies and licensees under the Financial Institutions Act.
For the financial year 2002/2003, the Group registered strong net interest income of $2 billion. Gains on disposal of investments came in at $390 million, while unrealised foreign exchange gains of $308 million and contributions from the subsidiaries of $397.4 million before tax all made it a good year for JNBS's general manager Earl Jarrett and his management team.
At the end of March 2003, the Group's net surplus before tax stood at $1.82 billion with after tax at $1.38 billion. The Society recorded a net surplus of $1.06 billion. This net surplus after tax figure compares favourably with last year's figure of $771 million.
ASSETS
The Society's assets of $27 billion represents a 16.13 per cent growth on the previous year or $3.74 billion. Earl Jarrett has long urged that Jamaicans should get into the habit of saving and has encouraged the opening of savings accounts to mitigate against the unpropitious economic climate that is prevalent in Jamaica today. A $2.31 billion or 11.84 per cent increase in the Society's savings fund, which includes retained interest income on savings balances, was the major driver of its impressive assets figure. At the end of March, JNBS' savings fund balance stood at $21.84 billion. The ratio of capital and reserves to savings was 19 per cent and capital reserves to assets was 15.42 per cent at the end of the financial year.
MORTGAGES
A total of 1,485 new loans were approved, of which 1,375 were disbursed at year's end. At the end of the year the Society's loan book stood at $9 billion or 13,031 loans, representing a 2.6 per cent increase over the loan book at March 31, 2002 in number of loans and a 22.5 per cent increase in the value of the mortgage loan portfolio. These figures include a total of 92 loans for a value of $54.36 million purchased during the year.
JN FUND MANAGERS
JN Fund managers, a subsidiary company, was founded some three years ago but already has made a significant mark. Speaking at JNBS's annual general meeting at its Half-Way Tree headquarters on Wednesday, Mr. Jarrett announced that the company has a portfolio of some $6 billion. The profits in this company have grown from $13.9 million to $16.4 million for the period under review. For the year to date profits in this company have grown to $75 million, thereby outpacing a number of its competitors.
JN REAL ESTATE
JNBS real estate arm, Jamaica National Real Estate Company (JNREC), has as its mission the task of establishing itself as the leading real estate company in Jamaica. For the year under review its revenues moved from $23.6 million to $43.9 million. However, profits went down. "We are in the process of reorganising that company and during the next few months you will see a new thrust in sales, valuation and property management services. This company is a natural pick within the JN Group and we plan to give it major attention," said Mr. Jarrett.
JN SMALL BUSINESS LOANS
This company began some three years ago and this year has increased its loan portfolio from $55.6 million to $67 million, a 20.5 per cent increase. This came about as a result of an increase of 26 per cent in the level of disbursements, which moved from $223 million or 7,408 loans to $280.3 million or 9,690 loans.
In response to market demand, JN Small Business adjusted loan sizes and terms during the year. The maximum amount for a first loan moved from $20,000 to $50,000, while the maximum loan went from $120,000 to $200,000. The maximum loan term was also adjusted from 40 to 50 weeks.
