Barita posts strong quarter as investment gains surge, costs spike

Barita posts strong quarter as investment gains surge, costs spike

Barita Investments Ltd reported net profit of $1.17 billion for the quarter ended March 2026, nearly double the $628 million earned in the same period a year earlier, reflecting a rebound in investment gains and higher interest income.

It's also the first set of results since Dr Marlene Street Forrest, the former Jamaica Stock Exchange managing director, joined the Barita board in February.

Chairman Mark Myers said the results reflected "a materially stronger second-quarter performance, with clear improvement across the group's core earnings drivers" pointing to gains across interest income, asset management and trading activity, and said the group was entering the second half of the financial year "with confidence".

For the six months to March 2026, net profit rose 17 per cent to $1.38 billion from $1.18 billion, while net operating revenue climbed 36 per cent to $4.9 billion from $3.6 billion.

Investment Gains Drive Rebound

The quarter's performance was driven primarily by a 154 per cent surge in gains on investment activities to $1.9 billion, up from $744 million a year earlier, fuelled by fair market value gains on the equity portfolio of $1.52 billion. For the six-month period, investment gains rose to $1.87 billion from $1.25 billion.

Net interest income also expanded sharply, rising 236 per cent in the quarter to $714 million from $213 million, and 145 per cent for the half-year to $937 million from $382 million, reflecting higher yields and increased deployment of interest-earning assets.

Fees and commission income grew 9.0 per cent for the six months to $2.02 billion from $1.85 billion, supported by growth in assets under management.

Foreign exchange trading and translation, however, swung to a loss of $13 million for the half-year, compared with a gain of $57 million in the prior period.

Costs Surge On Technology 

Profitability was partially offset by an escalation in operating costs. Total operating expenses for the quarter rose 85 per cent to $2.23 billion from $1.21 billion, with administrative costs more than doubling to $1.76 billion from $792 million.

The principal driver was a non-recurring charge of some $883 million arising from the group's decision to transition from its existing core technology system to a newer platform. Previously capitalised costs associated with that system were accelerated through the income statement during the quarter. The company described the charge as accounting-related and non-recurring in nature.

Staff costs also increased, rising to $434 million for the quarter from $387 million. For the six months, total operating expenses climbed 60 per cent to $3.15 billion.

Acquisition Expands Platform

in January, Barita assumed full ownership and operational control of JN Fund Managers Limited, subsequently renamed Barita Fund Managers Ltd after receiving regulatory approval in March. The acquired business contributed net operating income of $180 million and profit after tax of $55 million to the group for the period.

The acquisition, for which Barita paid $3.8 billion in cash, generated goodwill of $590 million. The company said the deal deepens its asset management capability, adds pension fund management, and broadens recurring fee income.

Balance Sheet Grows

Total assets increased to $179.2 billion in March from $149.6 billion last September. Shareholders' equity closed the period at $36.4 billion, up $1.3 billion year-on-year. The group's capital adequacy ratio stood at 24.4 per cent, more than twice the regulatory minimum of 10 per cent. 

business@gleanerjm.com