Jamaica Money Market Brokers (JMMB) has acquired a 80 per cent stake share in Corporacion de Credito America S.A. (CCA) a Dominican Republic-based savings and loans institution.

The deal is subject to regulatory approval.

The US$1.2-million transaction (J$107 million), financed, JMMB said Tuesday, from its own resources, expands the brokerage's presence in that country, where it already operates a securities firm, JMMB BDI America, acquired two years ago for US$5 million.

"This acquisition complements JMMB's regional diversification strategy as the company seeks to more effectively fulfil the finan-cial needs of the local market in the Dominican Republic," said JMMB in a statement to the Jamaica Stock Exchange on which its stock now trades at $3.90.

CCA was established in 1971 under the name American Premium Fund-ing, SA by the Ginebra family.

The Ginebras, who are already minority partners with JMMB in BDI America, retains 18 per cent of CCA, while the other two per cent is held by unnamed private investors.

"We have submitted an application for regulatory approval and expect a response within five months," Duncan told Wednesday Business.

Transformation

In 2007, the company was transformed into a full-fledged savings and loans institution, providing savings accounts, loans, credit cards and cambio services primarily to the retail market in the Dominican Republic.

At home, JMMB is also exploring entry to the commercial banking market, and has already placed an application with the Bank of Jamaica.

Duncan has said previously that JMMB plans to use Dom Rep as springboard into markets in the wider Central America, including Costa Rica, Honduras and El Salvador.

The value of its investments there now stands at US$41.7million, said the Jamaican brokerage, which also has holdings in Trinidad and Tobago and St Lucia.

"In looking at the three major jurisdictions in which we've made investments, the JMMB Group has a solid outlook, effectively working the investments already made while continuing to look for more of the right opportunities," said Duncan in a statement appended to the company's six-month results ending September 30, 2009.

"With the Dominican Republic leading in terms of economic performance, as the country continues to show positive real GDP growth since the start of the recession, we are positive on the trajectory of growth," he said.

But like Jamaica and other Caribbean countries, Dom Rep has also had to turn to the International Monetary Fund - which in October approved a US$1.7-billion borrowing facility - for support to weather the financial crisis that began in the United States but spread globally.

JMMB states that it is now the third largest financial institution in Jamaica, with an asset base of $124.4 billion, and capitalisation of $6.3 billion.

But the JMMB has reflected a steep drop in its bottom line since the start of its financial year in April.

At half-year ending Septem-ber, JMMB reported net profit of $363 million, a mere one-third of HY2008's $1.1 billion, but the 2008 results were skewed by a one-off gain of $2.3 billion from sale of an asset, which in turn was counter-balanced by a near $1.9-billion impairment of financial assets.

Operationally, however, JMMB's performance improved from $50 million to $193 million in the second quarter, in a year-on-year comparison, and from $288 million to $344 in the six month periods.

Building on its presence in Dom Rep, JMMB says it will be offering new products and advisory services for mergers and acquisitions, and that its future plans include offering CCA's products in local regions such as La Romana, Bavaro, Santiago, La Vega and Punta Cana.

sabrina.gordon@gleanerjm.com