Tue | Aug 22, 2017

Scotia Group profit grows 14%

Published:Friday | December 9, 2016 | 12:00 AM
Scotia Group President & CEO Jacqueline Sharp

Scotia Group Jamaica (SGJ) reported a 14 per cent rise in net profit to $11.6 billion for the year ended October 2016, up from $10 billion.

It translated to earning per share of $3.63 for the full year.

The banking group also reported total comprehensive income of $12.16 billion, but this was lower than the $14 billion recorded in 2015.

The fall in total comprehensive income appeared mainly related to remeasurement of its defined benefit pension plan, whose movement was unmatched by the $5.6 billion recorded in 2015, according to Scotia Group's financials.

Last week, parent company Scotiabank Canada, in its reporting, recorded a 74 per cent annual plunge in Jamaica's comprehensive income, CDN$283 million to CDN$71 million, which Scotia Group said was due to Canada's special accounting of currency movements as well the net assets in Jamaica.

Canada later commented, also citing currency movements as well as "timing differences in the treatment of certain items under Canadian accounting standards versus Jamaica accounting standards".

The earnings for 2016 is not a new record. It matches the nominal performance set seven years ago.

"We have made significant gains this year, against the backdrop of dynamic changes facing our industry, locally and internationally. Throughout the year, we have consistently reported solid growth in our business lines, all of which have exceeded our goals this year," said President & CEO Jacqueline 'Jackie' Sharp in a statement accompanying the results.

Based on the results, the bank has approved a more generous dividend for the final quarter of 45 cents per share, payable on January 18. It reflects a six per cent increase in dividends year-over-year, and a dividend payout ratio of 47.08 per cent.

The overall payout at 45 cents per share will amount to $1.4 billion in January. Usually, the bank paid quarterly dividends at 42 cents per share totalling $1.3 billion.

Scotia Group's improved performance came from four of the five business segments. The exception was insurance, whose profit fell to $3.5 billion from $3.8 billion a year earlier. Retail banking earned $5.3 billion, up from $3.8 billion; corporate banking earned $2.1 billion, up from $1.7 billion; investment banking earned $1.8 billion, up from $1.5 billion; and treasury earned $3.1 billion, up from $2.5 billion.

Scotiabank Express

During the quarter, the group opened four Scotiabank Express locations, to offer more convenient banking solutions to customers.

"Customer feedback has been very positive, and we will continue to focus on enhancing these alternate delivery channels to enable the varied banking preferences of our customers," Sharp said.

The banker, who now heads an operation valued at $477 billion by assets, indicated that in upcoming months, the group will roll out its new chip-enabled credit cards which offers increased card security.

The banking group's assets increased by 10 per cent over the year, due to the growth in loans, which spiked by eight per cent to $167 billion. Its non-performing loan portfolio shrank from 2.9 per cent of overall loans to 2.6 per cent. The NPL portfolio totalled $4.4 billion at year end.

In September, Scotia Group wound up Brighton Holdings Limited, Scotia Jamaica Financial Services Limited, DB&G Corporate Services Limited and Billy Craig Investments - all wholly owned subsidiaries. The four entities contributed a combined $38 million in profit before taxes to the group in 2016.

steven.jackson@gleanerjm.com