Sun | Aug 20, 2017

Scotia Group buoyant in third quarter

Published:Friday | September 16, 2016 | 9:00 AMSteven Jackson
Jacqueline Sharp, president and CEO of Scotia Group Jamaica Limited.

Banking conglomerate Scotia Group Jamaica (SGJ), in one of its best third-quarterly performances, earned net profit of $3.4 billion or 47 per cent more than a year earlier, due to strong results in all business segments, including its investment management services.

Over nine months ending July 2016, the group made $8.4 billion, up from $6.2 billion a year earlier. Earnings per share for the third quarter hit $1.07, up from 72 cents; and over nine months grew to $2.64 from $1.93 a year earlier.

The Scotia Investments Jamaica Limited stock gained 13 cents on Tuesday when its results were released to the market and climbed even higher on Wednesday to close at $25.94. The SGJ stock initially rose Tuesday by eight cents but lost nine cents the following day to close at $29.99.

"We continue to show strong performance this year, resulting from the execution of our strategic initiatives to grow revenues and reduce operating costs," said Jacqueline Sharp, president and CEO, in remarks accompanying the banking group's financial statements.

Total operating revenues for the banking group over three months ending July increased to $9.4 billion or 15 per cent year-over-year, while operating expenses fell by some $130 million to $4.7 billion.

"All business lines showed good volume growth year-over-year, as we continued to meet our customers' diverse needs," said Sharp.

Over the nine-month period, retail banking remained the dominant contributor to revenue at $3.8 billion; treasury contributed $2.2 billion; insurance, $2.6 billion; corporate banking, $1.6 billion; and investment management, $1.2 billion.

The bank's loan portfolio also rose to $163.9 billion while tamping down further on non-performing loans, or NPLs.

The NPL portfolio totalled $4.4 billion, representing 2.7 per cent of total gross loans, down from 3.1 per cent last year.

The bank recently launched upgraded Internet and mobile banking platforms, which Sharp described as well received by customers.

Total assets increased year-over-year by $48 billion to $472.7 billion. The growth was primarily attributable to increases of $15.2 billion or 10.2 per cent in loans, net of allowance for impairment losses; $30.3 billion or 12.7 per cent in cash resources, investments and pledged assets, and $2.5 billion in other assets, resulting from a higher guarantees and retirement benefit asset on our defined-benefit plan pension scheme, said the group.

The banking group's capital base grew to $90.7 billion, increasing by $9.1 billion or 11.14 per cent year-on-year.

Scotia Group will pay its usual quarterly dividend of 42 cents per share on October 25, amounting to $1.3 billion.

steven.jackson@gleanerjm.com