Annual Report 2019 – Management Discussion and Analysis

Financial Performance HMB’s total assets grew by $81 million ending the year at $3.3 billion. Our cash position remained stable ending the year at $27 million. Loans and advances continued to grow to end the year at $2.4 billion while debt increased marginally year-on-year. These changes in financial position allowed HMB to keep its gearing ratio relatively stable.

HMB recorded net interest income of $163 million for the year ended 31 December 2019, a 12% increase compared to $146 million in 2018. Total expenses were reduced by 6% to end the year at $93 million compared to $98 million for the previous year. Net income from operations ended the year at $77 million, a marginal decline of 3% compared to the prior year of $80 million, principally driven by the absence of dividend income, as HMB strategically sold its equity portfolio in 2018.

Net profit after tax was $56 million compared to $91 million for the previous year. Net profit after tax was reduced as HMB’s taxation increased due to the absence of tax-exempt income and the one-time impairment reversal relating to HMB’s investment with CLICO Investment Bank. Despite the fall in net profit after tax, total comprehensive income increased year-on-year by 109.1% to end the year at $46 million compared to $22 million for the prior year.

Investments and Funding Activities

The local fixed income market showed significant depth in 2019 raising $11.3 billion via seventeen (17) issues; according to the Central Bank Economic Bulletin (January 2020 & July 2019). The Government of Trinidad and Tobago was the dominant player issuing ten (10) bonds valued at $7.2 billion.

Asset Backed Securities

In 2019 HMB successfully re-introduced Collateralized Mortgage Obligations (CMOs) to the local market. The security’s issue size was $200 million and included a wide cross-section of investors including individuals, credit unions, insurance companies and fund managers.

In addition to issuance of the CMO, HMB had under management $483 million in its Mortgage Participation Fund as at December 2019. HMB plans to launch a new mutual fund called the Samaan Tree Fund (STF) in 2020, which will provide customers with competitive market returns.

Commercial and Corporate Credit

HMB’s Commercial and Corporate Credit portfolio has been increasing steadily despite the economic challenges and competition faced by larger financial institutions. We continue to focus on our strengths by providing tailored financial solutions and a competent team of professionals who are willing to work with developers.

As at December 31, 2019, HMB net disbursement for commercial mortgages were $269 million. The portfolio comprised project financing, commercial facilities for land development and construction of multi and single-family homes for re-sale. In addition, to our primary commercial mortgage portfolio, HMB continues to purchase secondary mortgages from TTMF and in 2019 purchased $404 million in mortgages.

HMB continues to support the initiatives of the Housing Development Corporation (HDC) and its mandate to provide affordable homes. In 2019 HMB launched three (3) new products to compliment the initiatives undertaken by the HDC which included special financing for the Public/Private Sector Partnership (PPP), Housing Construction Incentive Programme (HCIP) and the Small/Medium Contractors Housing Initiative. Print and social media were used to promote these new initiatives.

Risk Management

HMB’s Risk Management department encompasses all the activities related to controlling the various risks that may affect HMB directly or indirectly from achieving its objectives. The responsibility for Risk Management lies with the Audit, Risk and Compliance Committee and at the Management level, the Management Risk Committee (MRC).

The Board receives quarterly reports on the top ten (10) highest ranked risks with the relevant status updates and commentary.

HMB continued to enhance and strengthen its Risk Management Framework in 2019 with the development of a Business Continuity Plan (“BCP) and the Board approval of the BCP policy in November 2019. Full implementation of the BCP is expected in 2020.

Human Resources

Human Resources (HR) implemented a number of initiatives to improve existing systems and processes, enhance the employee experience and drive the achievement of organisational objectives.

We strengthened our workforce value and enabled our employees to meet their full potential through focused training initiatives identified in performance management conversations. Seventy-nine percent (79%) of planned training initiatives were completed. Additional initiatives, accounting for forty-six percent (46%) of the total completed development programmes, enabled employees to respond to the changing environment in which we operate.

The human resources team improved the delivery of core HR activities including efficient compensation and benefits administration, the introduction of policies and procedures to underpin the acquisition and retention of high-performing talent and the provision of safety and health services through a collaborative work model which facilitated employee involvement from all business functions.

Our efforts to foster a culture of positive employee engagement included innovative team building and employee appreciation activities developed and implemented by employees. We facilitated a tiered communication process through structured staff meetings and open dialogue between managers and team members, creating increased collaboration and continuous real time understanding of employees’ perception of the work environment. The results from the independent employee satisfaction survey (ESS) show that these efforts have already had a positive impact with the ESS score improving in 2019. Our aim is to maintain this momentum as we seek to develop a framework to encourage employees to raise concerns and empower them to initiate improvements.


HMB continues to operate efficiently despite the economic challenges. Our Strategic Alliance with TTMF continues to mature as we build on developing synergies, leveraging our strengths and becoming a united force within the market.

With the advent of COVID-19; 2020 will present numerous challenges. However, HMB will continue to roll out the various aspects of our BCP in a bid to combat the economic fallout from this pandemic. We will continue to adopt the measures outlined by the Government of Trinidad and Tobago in addition to maintaining the overall safety of our staff, customers and stakeholders.

Brent Mc Fee
CEO (Ag.)

Review Annual Report 2019