JMMB sanitises Capital & Credit debt - Business - Jamaica Gleaner - Friday | August 3, 2012: "Jamaica Money Market Brokers (JMMB) says it has cleaned out and transferred more than two-thirds of the bad debts plaguing its newly acquired merchant bank and plans to re-apply for a commercial banking licence within two years.
The company also expects to finalise the merger of newly acquired Capital & Credit Financial Group (CCFG) by March 2013 having began the integration from July 2. Seventy-four of the 160 staff at CCFG were cut."
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The acquisition will result in JMMB winding-up CCFG's securities arm, while keeping its merchant bank, pension, funds management and remittance services. These will eventually receive JMMB branding.
"We have moved a significant amount of bad debt out of the bank to free up capital. We will be looking to aggressively have a team to wind-up the non-performing loans and another team to grow the loan portfolio. The bad loan portfolio will be significantly reduced, almost 70 per cent of the bad loans will be moved out the bank," explained JMMB Group Chief Executive Officer Keith Duncan in an interview with the Financial Gleaner.
The bad loans were moved from the merchant bank into a "separate special-purpose vehicle" or a related shell company which will manage the subsequent sale of the assets underlying the bad loans over a two-year period.
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