NIBJ Earned Operating Revenue of $657 Million

The National Investment Bank of Jamaica (NIBJ) earned operating revenue of $657.57 million for the 2004/2005 fiscal year. The amount was $150.52 million or 29.69 per cent in excess of the $507.05 million that was generated in 2003/04.
As contained in a Ministry Paper that was tabled in the House of Representatives yesterday (Sept. 5) by Finance and Planning Minister, Dr. Omar Davies, the increase was due mainly to capital investments in various projects, which grew by $159.2 million to $596.3 million. The major income earners were Ritz Carlton/Rose Hall ($270.59 million); Swept Away hotels ($14.05 million); Touchpoint Centres International Jamaica ($22.83 million); and investments in United States money securities ($30.62 million).
The investment bank’s operations remained profitable at the end of March 2005, resulting in a net profit of $368.13 million. This represented a reduction of $53.37 million below the $421.50 million realised in the previous year and was due directly to a decline of $137 million in gain on revaluation of assets and a net loss on foreign exchange, despite an increase of $150.52 million in revenues over 2003/2004. Overall, the bank’s profit margin was lowered to 55.98 per cent compared to 83.13 per cent in the prior year.
During the year under review, the Bank invested in three new tourism based projects: Orange Valley Holdings Limited, Morgan’s Harbour Limited and Grande Resorts Limited, totalling $584 million. These investments continued the trend of tourism-funded ventures by NIBJ, which make up 72 per cent of the Bank’s total investments.
However, at the close of the review period, the bank diversified its portfolio to include a wide range of projects and sectors such as information technology , agro-processing and manufacturing.
The Ministry Paper noted: “the bank continued to invest in a range of instruments and its portfolio mix included preference and ordinary shares, which totalled 41 per cent or $2.8 billion.”
The balance of 59 per cent was funded by a variety of secured and unsecured loans with valuation of $6.82 billion.
The bank also retained various exit strategy options while seeking to restructure problem accounts and improve the level of returns to the NIBJ. In terms of the NIBJ’s asset base, this was recorded as moving from $8.2 billion in 2003/2004 to $9.4 billion in 2004/2005. Total assets also exceeded total liabilities by $4.4 billion compared to $3.9 billion the previous year.
Shareholders’ equities increased by 14.7 per cent; this was attributed to the growth in earnings of $368.13 million, revaluation reserve of $8 million and equity injection of $200 million from the Capital Development Fund.
It was noted that the NIBJ’s working capital was positive as indicated by assets of more than $2 billion, which was adequate to liquidate liabilities of $401 million.
The National Investment Bank of Jamaica is wholly owned by the Government of Jamaica (GoJ) and is mandated to foster economic growth and balanced development through investments in strategic sectors of the economy and the privatisation of selected government-owned assets.