JMMB : 15 Aug 2023 – JMMB Group Limited – Unaudited Financial Statements for the quarter ended June 30th, 2023

JMMB GROUP LIMITED

Three Months Highlights

Three-month period ended 30 June 2023

(Expressed in Jamaican dollars unless otherwise indicated)

DIRECTORS' STATEMENT

PERFORMANCE HIGHLIGHTS

Net Operating Revenue	J$6.59 billion
Net Interest Income	J$2.10 billion
Net Profit	J$2.55 billion
Earnings per Stock Unit	J$1.28

The Directors are pleased to announce that the JMMB Group Limited posted net profit of J$2.55 billion and earnings per share of J$1.28 for the three months ended 30 June 2023.

GROUP CEO'S COMMENTARY

Credible despite difficult market conditions

The quarterly performance was delivered in the face of challenging market conditions and underscores the efficacy of the group's diversification strategy. The Group remains steadfast in its execution of this strategy as reflected by increasing contributions to revenue from territories outside of Jamaica as well as business lines outside of Investments.

The Group remains solid, safe and secure as evidenced by its continued maintenance of regulatory capital requirements for each operating territory. The Group's policy has been to maintain a strong capital base that exceeds regulatory requirements to enable continued growth of the business and maintain the confidence of the market. The team remains steadfast in its purpose and its mission to transform the lives of each client that it serves and the territories within which it operates.

Revenue diversification strategy delivers notable performance

During this period, the contractionary monetary policy resulting in a high interest rate environment particularly in Jamaica and the Dominican Republic continued to impact the financial performance of the Group. These conditions impacted net interest income as well as gains on securities trading during the period, which are historically key drivers of revenue for the business.

The JMMB Group's diversification strategy has consistently positioned it to successfully deliver strong financial performance, particularly during challenging market conditions. Notably, the Group's strategic investment in Sagicor Financial Company Limited (SFC) contributed J$1.73B to the Group's profitability.

Strengthening capabilities to satisfy client needs

The JMMB Group continues to prioritize the safety of its clients and has continued to proactively enhance its ability to protect client data, mitigate cyber threats, and maintain the trust and confidence of its valued clients. Additionally, the team continues to execute its digital transformation agenda geared towards improving operational efficiency, client experience and enabling deeper client partnership. The Group's online banking platform, Moneyline, empowers clients to monitor and manage their portfolios digitally without visiting a branch.

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JMMB GROUP LIMITED

Three Months Highlights

Three-month period ended 30 June 2023

(Expressed in Jamaican dollars unless otherwise indicated)

Looking ahead

According to the IMF's World Economic Outlook published in July 2023, global headline inflation is expected to fall from 8.7% in 2022 to 6.8% in 2023 and to 5.2% in 2024. This expectation signals that markets could experience gradually improved conditions, as central banks are expected to lessen monetary policy.

This outlook augurs well for projected financial performance, as this would result in a rebound of the market to include lower cost of funds and improved margins on the banking and investment business line, improved asset prices as well as investment and trading opportunities which would result in improved performance of the Investment business line.

In the quarter ahead, the Group will remain focused on its "smart growth" strategy through diversification of earning streams, expansion into new geographies, expanding and launching new business lines, launch of new products, while improving operational efficiency to drive growth and profitability.

GROUP FINANCIAL PERFORMANCE

Net Operating Revenue

The Group posted net operating revenue of J$6.59 billion for the three months ending June 30, 2023, reflecting a marginal increase of 1%. This was within the context of a challenging operating environment as global interest rates are much higher than the prior period. This especially impacted margins and consequently, net interest income declined by 28% to J$2.1 billion. Market sentiment also impacted fees and commission income as well as FX trading gains were 17% lower at J$1.39 billion and 24% lower at J$671 million, respectively. Otherwise, clients continue to demonstrate confidence in the value of solutions and services as evidenced by the strong growth of the loan and investment portfolios.

Whilst the market condition is not conducive to outsized trading gains as regular trading activities remained low, the Group continued to execute the strategy of nimbly identifying and successfully executing trading opportunities. Further, the monetary policy direction was reversed in the Dominican Republic to an expansionary stance. This was evidenced by two policy rate cuts during the quarter and resulted in higher levels of trading. Thus, trading gains were 131% higher at J$2.36 billion.

Segment Contribution

The table below shows the contribution to net operating revenue by segments.

JMMB GROUP LIMITED

Three Months Highlights

Three-month period ended 30 June 2023

(Expressed in Jamaican dollars unless otherwise indicated)

The Banking & Related Services segment contributed J$3.29 billion or a half of net operating revenue. This was flat when compared to the prior period as the segment was adversely

impacted by rising interest rates. Nevertheless, there continued to be strong growth in the loan book.

The Financial and Related Services segment contributed J$3.08 billion or 47% of net operating revenue and reflected a decline of 5%. This largely reflected rising interest rates as well.

Operating Efficiency

Operating expenses moved from J$5.32 billion to J$5.82 billion and reflected inflationary increases as well as strategic spend related to longer-term initiatives aimed at improving the posture and positioning of the Group. Thus, operational efficiency moved from 81% to 88%. Nevertheless, the Group will continue to focus on projects aimed at yielding scale and efficiency and thus contribute to long term shareholder value.

Interest in Associated Company

For the period under review, the Group recorded share of profits of J$1.73 billion from its associated company, Sagicor Financial Company Limited (SFC). These results reflect the adoption of IFRS 17 - Insurance Contracts, which the Group adopted April 1, 2023. Given that SFC adopted a retrospective approach, the prior year's financial result was restated and reflected a share of loss of J$2.9 billion (Note 6).

JMMB GROUP LIMITED

Three Months Highlights

Three-month period ended 30 June 2023

(Expressed in Jamaican dollars unless otherwise indicated)

GROUP FINANCIAL POSITION

Total Assets

At the end of the reporting period, the Group's asset base totalled J$679.6 billion, up 3% relative to the start of the financial year. This was mainly on account of a larger loan portfolio which grew by 6% to J$189 billion. The credit quality of the loan portfolio continued to be comparable to international standards and the Group continues to maintain enhanced monitoring to mitigate against possible deterioration in credit quality. Growth in the asset base over the three-month period was primarily funded by an increase in customer deposits. Deposits grew by 6% to J$182.70 billion.

Capital

Over the three-month period, shareholders' equity increased by 13% to J$56 billion. This was on account of increased net profit posted as well as an improvement in the investment revaluation reserve. Thus, the Group continues to be adequately

capitalized and all individually regulated companies within the Group continue to exceed their regulatory capital requirements. The performance of the major subsidiaries is shown in the table above.

Off-Balance Sheet Funds under Management

The Group continued to execute on its strategy to provide complete, customized financial solutions for each client. This includes off-balance sheet products such as pension funds, unit trusts and money market funds. For the period under review, congruent with the decline in asset prices globally, assets in these funds were adversely impacted. Consequently, the total invested in off-balance sheet products as at the end of June 2023 stood at J$186.08 billion compared to J$190.04 billion as at 30 June 2022.

JMMB GROUP LIMITED

Three Months Highlights

Three-month period ended 30 June 2023

(Expressed in Jamaican dollars unless otherwise indicated)

The JMMB Group in the Community

JMMB Group remains committed to forging and maintaining genuine relationships with the wider society, in which it operates, across Jamaica, Dominican Republic and Trinidad & Tobago. During this period, the Group's corporate social responsibility efforts was largely focused on: educational initiatives, transformational training, entrepreneurship and other community outreach initiatives.

The JMMB Joan Duncan Foundation in Jamaica, focused primarily on nation-building initiatives, educational development, and transformational training. As such, the Foundation answered the call to support the transformation of Jamaica by committing J$60M to Project STAR, a social transformational and renewal programme, led by the Private Sector Organization of Jamaica (PSOJ) in partnership with the Jamaica Constabulary Force (JCF). In keeping with one of the key components of Project STAR, to provide pathways for employment, JMMB Group has provided employment opportunities for more than 40% of the individuals in Cohort 1 of the project, with one-year contracts. This is a tangible way of empowering individuals towards economic sustainability for themselves and their families.

Additionally, the Foundation staged its second Conversations for Greatness (CFG) conference where hundreds of attendees were challenged to join the 'One Love' Movement and play an active role in transforming Jamaica through the 'Power of Love'. Through this conference the Foundation hopes to ignite a sense of personal responsibility among Jamaicans to bring to reality the equitable nation conceived as part of Vision 2030.

In honour of the life and legacy of the late Joan Duncan, the 10th annual memorial lecture hosted by JMMB Joan Duncan Foundation and Utech, Jamaica brought together experts and enthusiasts to discuss the business of entertainment industry - opportunities and challenges. Ibrahim "IB" Konteh, entrepreneur, author and expert marketer was the guest speaker.

The Foundation continued to support the Child Resiliency programme to the tune of approximately J$16M. This after- school programme is designed for children identified as being at risk for violence and abuse. Through partnerships with school, community, church, family and police, the programme integrates sports, nutrition, cultural arts and academic support to build resiliency in the children referred.

To mark Child's Month, the JMMB Joan Duncan Foundation partnered with the National Child Month Committee (NCMC) by funding the playground for Old Pera Basic School located in St. Thomas. The donation will assist to create a safe, inclusive, and supportive environment for play for the over 50 students in attendance at the school.

In the Dominican Republic, the team continued to focus its efforts in supporting youth development through entrepreneurship, financial literacy and community outreach. As such, the team continues to partner with the UNPHU entrepreneurship center, to provide financial advisory services, facilitate in the promotion of products and services, trainings and workshops for these budding entrepreneurs, who are a part of the programme.

As part of its community outreach efforts, the team also continued to support the welfare and nutritional needs of children at selected homes and orphaned children.

Over the period, the Corporate Social Responsibility (CSR) committee in Trinidad & Tobago, spearheaded a range of community outreach initiatives and entrepreneurial projects. The team partnered with The Humming Bird Foundation, which supports children with long-term diseases. Additionally, the CSR team lead the donation efforts at Hope General Children's unit where toys, books were distributed as well as renovation of a room. The JMMB Group team in TT also partnered with the Soroptimist Club of San Fernando to donate solarponics to grow vegetables for a community, while also supporting other community outreach projects.