ALL BASES COVERED

Dominican Republic 2019 | GREEN ECONOMY | INTERVIEW

JMMB has played a key role in shaping the Dominican Republic securities market. Having served all types of clients over its 25-year history, it is now shifting its focus toward SMEs and high-net-worth individuals.

Guillermo Arancibia
BIOGRAPHY
Guillermo Arancibia has over 30 years of experience in the banking sector. He served in different roles for Citigroup for 19 years in several countries, including the US, Mexico, Peru, Argentina, and Chile. He also supervised Citi’s activities in over 14 countries in Latin America. In June 2006, Arancibia joined the JMMB family as country manager for the Dominican Republic. Since 2017, he has served as JMMB’s business development director for the Latin America region.

What strategies contributed to your recent upgrade to BBB+ rating?

Due to our more than 25 years of experience in the regional market and our philosophy of always having our clients' best interest at heart, we have established an active treasury parameter within a risk management scheme. We were pioneers in the country and have been present since the beginning of the Dominican Republic's securities market. The recent upgrade to BBB+ rating is a direct result of the work we have been doing over the past 12 years. Moving forward, our successful strategy and philosophy will not change.

Where do you see the most opportunity for JMMB?

We started diversifying when we began opening different lines of business. We have been shaping the industry with our retirement fund. We have positioned ourselves ahead of the competition due to the services we provide and our loyalty program. Notably, AFP JMMB BDI achieved the highest yield results at the closing of December 2018, as well as January and February 2019, providing the highest return rate for our affiliates' retirement savings. This data was presented by the Pension Superintendence (SIPEN), the Dominican Authority for Pension Funds Management. If our affiliates stay with us in the long run, they will recover money that many other pension fund administrators (AFPs) do not. The idea is to diversify the risk for the company and generate different business, given the uncertain times for some emerging markets. This way we are able to cover our clients through their life cycle thanks to our wide range of products, from savings accounts to products for investors.

What is your outlook for private pension funds in the Dominican Republic?

There are a number of benefits to creating a retirement fund, even considering that many Latinos do not generally like to save. The regulator is starting to pressure other AFPs because we started to talk about issues that have long been ignored. Retirement funds are the best way to save because the money is protected and in your name; the administrator may change, but the fund is always yours. We are trying to educate people on the importance of AFPs, and we do this in many ways. We have monthly statements, a webpage, a monthly email newsletter, and in our sales pitch, we explain the importance of having a fund like this. There are thousands of people who don't have an accidental insurance or have died without their right to receive their pension, for themselves and their families. The regulators now ask for information about beneficiaries if the client dies. This is something that happened because we brought up the issue. Moreover, this allows the financing of different economic activities, like infrastructure projects or public housing. These funds are stable long-term investments that benefit not only the client but the entire country.

How do you expect your client portfolio to evolve in the short term, and what type of clients are you interested in?

We serve all types of clients, including individuals, retail, and corporations. Our new target over the next two-to-three years is SMEs. We expect these sectors to grow in the short term. We also want to increase our relationship with high-net worth individuals.

What are your goals and expectations for 2020?

We know that the Dominican Republic's economy is growing. We plan to take advantage of this opportunity and continue to grow our business. We expect to see an improvement in the levels of liquidity, and thus in the levels of consumer optimism, which leads to people spending more money. 2020 is an election year, and we have to pay attention to public sentiment because people are more cautious in election years. Investments tend to slow down, and the growth of the country will be a little slower. The government has the opportunity to make some investments on its own to keep the economy running. We believe 2019 will be a harvest year. We are going to reap what we have sowed in previous years.