General manager of Pan Caribbean Merchant Bank, Henry Pratt. PCMB will complete its transformation to a commercial bank by mid-2008. - File

Jamaica Money Market Brokers Limited (JMMB) plans to launch a commercial bank in Jamaica, but says a final decision rests on the results of a demand study under way.

"The study has being running for about a week and is expected to be completed by the end of October," said JMMB market manager Marguerite Cremin.

The study results are meant to guide JMMB on the type of product development. Follow-up focus groups will guide the bank on the viability of its plan.

The financial house has already completed its market analysis to identify niche markets, but declined comment on the details saying the results from the study could not be shared until an application for licence was made and granted.

Niche markets

The new JMMB branch on Knutsford Boulevard. JMMB hopes to launch a new commercial bank but says its decision rests on the results of market research under way. - File

JMMB is not looking to compete with the mainstream bankers, according to Cremin, who told the Financial Gleaner that the brokerage would be seeking out niche markets.

The commercial banking sector has had no new entrants since Trafalgar Commercial Bank was relaunched as FirstGlobal Bank in 2002.

Pan Caribbean Merchant Bank has a commercial banking licence that was approved in mid-2006 by the Bank of Jamaica, but PCMB said Thursday its conversion won't be completed until the second quarter of 2008.

"The conversion comes against the background of seeking to offer a wider range of services in response to the demand from customers and commercial banking is the only service that is not currently offered by the Pan Caribbean group of companies," said PCMB's Henry Pratt.

The group's equity base tops $7.5 billion.

He says the company is in the process of building out its physical, human and technological capabilities, including the recruiting of staff.

PCMB already exists in five locations across the island, but plans to build out its network further once the commercial bank is operational, said Pratt.

The commercial banking sector is dominated by Scotiabank and National Commercial Bank.

Central Bank Governor Derick Latibeaudiere, asked if the market was saturated, said that determination is often time specific, noting that when the economy is vibrant there is always room for more services.

The central bank, in considering new licence applications would be concerned only that the new entrant adds quality, and is sufficiently capitalised.

Jamaica Bankers Association president Patrick Hylton said he is inclined to believe the market is not saturated, noting that different players are emerging with "niche services".

"Many," said Hylton, "are involved in quasi-financial services."

Experience

JMMB has some experience in the commercial banking sector, having bought 50 per cent of the tiny Inter-Commercial Bank Limited in Trinidad, a two-branch operation. It has management control of the operation but has only run IBL for about two years.

It is in the process of adding three branches and 13 sales outlets to the IBL network.

The brokerage, which is capitalised at $6.6 billion, is administering its new survey to clients and the general public via electronic mail and telemarketing services.

JMMB said the bank under consideration will not be an expansion of IBL into Jamaica, but will be relying on the expertise reposited in that company.

"Should we decide to submit an application to the Bank of Jamaica upon the results of the survey, the proposed bank would be a stand- alone bank. However, we would naturally leverage the expertise and experience of the IBL team," said Cremin.

sabrina.gordon@gleanerjm.com