Building society squeezes clients to increase CI profits
Damion Hylton
(CNS Business): JN Cayman, a member of the Jamaica National Group, revealed a whopping 404% increase in its earnings during the 2016/17 financial year when it posted profits of CI$668,000, compared to a loss of CI$219,000 in the previous year. Managing director Damion Hylton told shareholders at the recent annual general meeting of the JN Cayman that the turnaround of the building society was down to a reduction in loan delinquency as the bank pursued bad payers earlier and more aggressively and cut the rate for savers. He said the increase was also due to an improvement in service delivery to clients.
“In regard to our delinquency reduction, we established benchmarks to ensure that we are speaking with our clients as soon as they enter the one to 30 days arrears category,” Hylton said. “This allowed us to understand their challenges and assist where possible. The focus on delinquency management also resulted in the recovery of several non-performing loans, based on structured repayment, and arrangements that cleared all arrears or resulted in the sale of the collateral, in instances where all other methods were exhausted,” he added.
Hylton revealed that as well as tackling bed credit, the low interest rate environment led to depositors getting a reduced rate. “This resulted in a reduction in interest expenses, which also allowed us to re-enter the loans market that supported the improved operating results for the financial year,” he stated.
The financial statements of the building society showed that net interest income moved from CI$1.12 million in 2016 to CI$1.49 million in 2017, representing a 33% increase. Meanwhile, bad debts written off increased by 82% to CI $1.1 million with provision for loans a positive CI$1.5 million, based on the recovery of non-performing loans during the year. These activities, therefore, resulted in the net benefit to the profit and loss account of approximately CI$405,000.
The loans portfolio increased by 30% to CI$32.6 million but the savings portfolio fell by about 2% from CI$51 million to CI $50 million. Hylton said this decline was based on the regulatory requirement for a closer alignment of deposits to the mortgage portfolio.
Reflecting on the achievements for the financial year, Hylton said that JN Cayman has a three-year strategic plan and one of its objectives was to return to profitability in one year, and that was achieved.
“For year two, we are centered on regaining our position in the mortgage market through the disbursement of credit facilities and increasing our visibility in Grand Cayman. In light of those objectives, we are developing several strategies that will be beneficial to new and existing customers,” he added.
JN Cayman also re-elected its board of directors and its auditor, KPMG.
The managing director congratulated the board for its efforts in facilitating the turnaround of the finances and commended its employees for their commitment to enhanced services.
Category: Local Business
Hmm I wouldn’t brag about foreclosing on homes and paying my depositors less interest – #justsaying
How do you figure a 404% increase? Since the prior year was a loss, you may as well say it was a thousand or a million percent.