THE JAMAICA Mortgage Bank (JMB), which enjoyed buoyancy in its financial performance and annual profits during 2005, is now lowering lending rates by three percentage points, effective January 1.
"The minimum lending rate charged by the bank will be reduced from 21 per cent to 18 per cent, as of the first of next month," Milverton Reynolds, general manager for the JMB, stated in a release. He explained that developers will benefit from this new initiative and, "This is an effort to make homes more affordable to Jamaicans."
Mr. Reynolds pointed out that the bank is passing on savings realised with the decrease in interest rates on treasury bills, which in turn has reduced the bank's cost of funds. Mr. Reynolds is hoping that savings realised from this reduction will be passed on to homebuyers, by lowering the prices of houses.
GOVERNMENT GUARANTEE
Earlier this year, the JMB secured a Government guarantee for the $500 Million Shelter Bonds, which the Victoria Mutual Building Society (VMBS) subscribed for in 2004/2005. The chairman of the JMB, Genefa Hibbert, has expressed delight in the bank's association with the VMBS and other organisations such as Jamaica National (JN).
The JMB is now looking at establishing a relationship with the National Housing Trust, which the company expects will result in even further reduction of rates.
The bank's profits of $155 million before taxes exceeded budget expectations for the first eight months of this year by 49 per cent, and is 29 per cent above the $120 million recorded for the same period last year. This is a feat achieved by tight control of expenditure and strong revenue growth. "The organisation is profitable and financially sound, and we expect our year-end profits to be very good," said the JMB's general manager.
The JMB is currently funding some 32 active projects, with a total commitment of $3.4 billion for the production of 5311 housing solutions. Six hundred and eighty of the units completed are located in the parish of St. Andrew, to which the JMB committed $1.27 billion.
