Jamaica Money Market Brokers (JMMB) more than doubled its nine-month profit to $1.8 billion but came out ahead of last year only because it sold off a portion of its holdings.

Had it not been for the $2.3 billion gain booked from the sale of its 45 per cent stake in a Trinidad brokerage, the company's operating profit would have been wiped out by the writedown of its financial assets.

For the nine-month period to December 31, 2008, JMMB reported impairment charges of $1.9 million, linked to losses sustained when Lehman Brothers went under.

Chief stewards of the company - chairman Noel Lyon and CEO Keith Duncan - said if the two one-off events were stripped from the results, JMMB would have ended up with net profit growth of 63 per cent relative to the $808 million of net profit reported in the nine-month period for 2007.

JMMB sold its stake in Caribbean Money Market Brokers to partner CL Financial group for US$41 million back in October, saying it would substantially strengthen the company's balance sheet.

Still, the company ended the period with more than $700 million erased from its capital base, which moved from $6.7 billion at financial year end March 2008 to $5.9 billion at current balance sheet date in December 2008.

Total assets grew, however, by $8 billion to $105 billion, due mainly to a $10 billion addition to its repo portfolio.

The company is currently restructuring, a process that includes the reshaping of business lines, and a staff cut that will eliminate 50 of some 350 jobs.

The brokerage says its insurance arm remains part of the business, denying reports that there were plans to close it down.

But Duncan said that business at the brokerage was being scaled down.

"In this environment with high delinquencies we will not be pushing the area of credit, which is not attractive at this time; international investment has been scaled down, insurance also scaled down with less focus on life and health insurance and more focus on the general side," he told the Financial Gleaner.

Other portfolios

The life and health portfolio is less than one per cent of revenue, he said.

The cost of the package being offered to the staff members made redundant was not disclosed, but the cuts will include both management and non-management posts and will trim the total number to 303, effective February 27.

"In the realignment JMMB will increase focus in the areas that offer more opportunities and reduce focus in areas that offer less opportunity in the current environment," said a JMMB release issued Wednesday.

sabrina.gordon@gleanerjm.com