In the absence of a matching one-off gain like the $3.9-billion sale of Lascelles deMercado shares, Jamaica National's profit slid 76 per cent in 2009 - but that represented a still enviable pre-tax return of $1.8 billion, even after the write-down of over half a billion dollars on the value of equities in the face of a bearish market.

After taxation of $650.2 million, the net profit was $1.15 billion.

"Despite the negative global economic market that impacted on the Jamaican economy, our organisation continued to provide quality goods and services and and record strong returns on savings an investment," JN Chairman Oliver Clarke said in his report to members.

Jamaica National, with assets of nearly $107 billion, is a mutually owned financial services group whose core operation is mortgage banking, via its Jamaica National Building Society - the island's largest, with a loan portfolio of $34.8 billion up 21 per cent on 2008.

The group's profit for the financial year ended March 31 was on revenue of $15.2 billion and in a context where the group's interest expenses, at $4.9 billion, were up 44 per cent, while its operating expenses rose a fifth, to $7.9 billion.

Million-dollar gain

However, with a net interest income of $5.9 billion and 'other revenue' of approximately $3.3 billion, JN reported an operating surplus of $1.26 billion, which was supplemented by unrealised foreign-exchange gains of $873.4 million and a near $200-million gain on the disposal of a business unit.

These, after the $561.5-million impairment loss on the group's equities portfolio, helped deliver the pre-tax surplus of $1.8 billion, compared with $5.3 billion in 2008.

"The shock of the economic crisis was also evident in the impact on our profits due to impairment losses on equities and challenging financial markets due to erratic movement in foreign-currency trading," JN's Group General Manager Earl Jarrett told shareholders at the AGM in Kingston this week.

Working to build

If, however, the $3.9 billion windfall from the sales of the Lascelles shares to the now troubled Trinidadian group, CL Financial, is removed from last year's revenue statement, the group's pre-tax profit would have been $1.4 billion, or 29 per cent below the return for the current period.

"I assure you that despite the challenges faced (last year), we continued to strengthen JN Group's position as a solid and secure transnational institution that you can continue to feel confident about as your investment and do business," Jarrett said.

Indeed, Jarrett suggested that Jamaican savers declared their appreciation of that message last year by putting their money with the group. The upshot: the saving fund increased by over $11 billion, or 21 per cent, to $64.54 billion.

With regard to the building society, members, Jarrett said, responded strongly to new, competitive saving instruments "by delivering an overall net savings inflow of $6.1 billion, representing one of the highest performances of the society in recent years".

Jarrett said the increase indicated that despite the harsh economic climate, members recognise the need to save.

"Our increased net savings intake of 20 per cent reflects that," Jarrett said.

Growing assets

Additionally, in the last financial year, the building society approved 1,407 loans and disbursed 1,477 mortgages, valuing $7.5 billion, an increase of $500 million on the previous year.

The average mortgage was at 14 per cent.

Assets of the JN also grew to $107 billion, representing a gain of $16 billion.

In the last quarter of the fiscal year, JN expanded its operations with the addition of a new JN Money Transfer Agents across the island and the opening of two more of its Money Shops in Old Harbour, St Catherine, and Highgate, St Mary.

It contracted an agent in Dominica and appointed the Ghana Merchant Bank as its representative in Accra, Ghana.

dionne.rose@gleanerjm.com