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Thursday, Oct 02, 2025

Jamaica National to explore banking licence in Cayman

Jamaica National to explore banking licence in Cayman

The loss of correspondent banking relationships and escalating costs for its remittance-service business have prompted Jamaica National Group to set up a commercial banking arm in the UK and investigate the possibility of launching a bank in Cayman.
Jamaica National’s chief executive officer Earl Jarrett said at the group’s annual general meeting last week that the correspondent banking crisis has significantly increased the cost of operation.

In the group’s annual report Jarrett wrote that Jamaica National has struggled to maintain correspondent banking relationships for JN Bank and its representative offices overseas, as well as JN Money Services, the remittance company that also operates in Cayman.

Money transmitters accept payments and bundle them together but need a bank to handle the international wire transfer. Banks, however, consider money-transfer operators high-risk clients. Because anti-money laundering regulations and fines have increased significantly in recent years, adding compliance costs and reputational risks, many banks have decided to cut ties with remittance-service providers, in a process known as de-risking.

In 2015, Jamaica National, which operated MoneyGram and several other cash-transfer brands in Cayman, lost its correspondent bank, Cayman National Bank.

JN Money Services experienced a 42% increase in banking costs in the UK over four years, while in the Cayman Islands, the cost rose by more than 1,000% over the past five years, Jarrett noted.

He said the company spent “an alarming” GBP2.3 million (US$2.96 million) and CI$2.8 million since the correspondent banking services were lost in both markets. In response the company had only applied very limited increases in transaction fees.

The increased costs could not be passed on to customers, Jarrett wrote, because it would have made the remittance entity uncompetitive.

To deal with the crisis Jamaica National is seeking to establish a commercial bank in the UK.

“The objective of the bank, JN Bank UK, is to provide banking services to the Caribbean Diaspora and the wider customer affinity base of Caribbean people in the UK, as well as, in time, offer deposit and savings and loan products to the wider UK market,” the chief executive officer said in the annual report.

The bank, which will be based in Brixton, London, is expected to launch in the first quarter of 2020.

In Cayman, this option is currently only being explored.

Since 2015, when money transfers from Cayman to Jamaica fell sharply as a result of the ‘de-risking’ crisis, remittances have increased again from US$101.6 million in 2016 to US$133.2 million in 2018, statistics from the Cayman Islands Monetary Authority show.

JN Money Services processed 1.35 million remittances worth US$374.8 million last year, a 9% growth.

In addition to its remittance business in Cayman, Jamaica National also provides deposits, savings and mortgages through JN Cayman, which returned “a modest profit of CI$134,000”. Growth was restricted by local requirements that there is a commensurate ratio between loans and deposits, the group’s annual report said.
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