In a year in which Victoria Mutual Investments Limited (VMIL) launched a Premium Wealth Service catering to ultra-high net worth clients, the company posted consolidated revenue for the year of JM$1.88 billion, an increase of JM$192.63 million or 11.4 per cent over the $1.68 billion recorded for 2019.
VMIL grew market share in the asset management business despite the turbulent investment markets, the directors
Victoria Mutual Wealth Management Limited, the company’s licensed securities dealer, grew assets managed on behalf of clients by 11.4 per cent, from JM$29.48 billion as at December 31, 2019, to JM$32.82 billion as at the end of the current period.
Year-on-year growth was due to strong net inflows of JM$2.18 billion from portfolio management clients and net inflows of JM$1.17 billion from unit trust portfolios.
For the year ended December 31, 2020, growth in revenue for the company was primarily driven by gains from investment activities, which increased by JM$108.09 million.
Consolidated profit after tax was $433.59 million, representing a reduction of 27.5 per cent when compared with the previous year.
Management said that the main contributor to the reduction in profit was the increase in the provision for impairment losses on financial assets of JM$215.36 million.
Michael McMorris, chairman, and Rezworth Burchenson, chief executive officer, noted in remarks attached to the results that during 2020, the global economy faced tremendous challenges with the novel coronavirus (COVID-19) pandemic severely disrupting all sectors of the economy.
Volatile asset prices in the investment markets impacted players in the financial services sector.
“Despite this impact, our business delivered a solid and creditable performance,” they stated.
Operating expenses, excluding the provision for credit losses on financial assets, totalled JM$1.12 billion, representing an increase of 14.7 per cent when compared to the previous year.
“This is mainly due to our investment in human resources as well as information technology and process improvements, which will allow us to seamlessly and efficiently launch various asset management products,” the directors noted.
At the end of the year, VMIL’s efficiency ratio grew to 59.8 per cent, up from 58.1 per cent in 2019.
VMIL launched a new Client Management Portal, its first digitisation project, which allowed clients to conveniently access their statements and make transaction requests online.
The company also added four new branches, taking the total number of touchpoints to ten, and executed on the regional expansion of Carilend, its peer-to-peer lending platform with the launch of Carilend Jamaica.
VMIL also launched new and upgraded systems in the areas of investment management, risk management, complaints management, anti-money laundering, and customer experience.
Total assets increased year-on-year by 17.4 per cent to $29.72 billion as at December 31, 2020, primarily attributable to an increase in resale agreement balances.
Total liabilities were $25.34 billion as at December 31, 2020, an increase of $4.34 billion or 20.7 per cent over the prior year, driven mainly by the increase in borrowings and repurchase agreements.
VMIL reported shareholders’ equity standing at JM$4.38 billion, up from JM$4.33 billion, which resulted in a book value per share of JM$2.92 (2019: JM$2.88).
The growth in total equity is mainly attributable to the net increase of JM$388.59 million in retained earnings, representing the undistributed portion of our 2020 retained earnings; and the year-on-year decrease of JM$332.48 million in the investment revaluation reserve, representing revaluation losses on investment securities and equity instruments.