Scotia refocuses on talent, client retention
As the competition spikes in the wealth management market, Scotia Investments Jamaica Limited (SIJL) is indicating that it plans to protect its own flank by focusing on both client and key staff.
"In particular, we are keenly aware of the heightened competition from other institutions. This environment demands that we assess and evolve our strategy to improve our product service offering and remain competitive," said CEO Lissant Mitchell at the annual general meeting (AGH), held at The Knutsford Court Hotel in Kingston.
Just recently, a new firm called Sygnus Capital opened shop in Kingston, with most of the key players and directors having a history as employees at Scotia Investments at different points in time. They include Berisford Grey, Gregory Samuels, Ike Johnson, Jason Morris, and Debra Lopez-Spence.
Mitchell said Scotia has realigned its focus to "proactively" provide client advice and putting the client at the centre of all activities, while also focusing on developing, recruiting and training top talent.
"We will be evaluating compensation, rewards and recognition practices, and building leadership," he said.
Risk management will remain a core focus for SIJL. It's a strategy that defined the company as one of the most conservative in a competitive sector with an appetite for risk.
SIJL improved its net profit in its latest financial year but, still, its return on equity hovers in single-digits, moving from seven per cent in 2015 to nine per cent in 2016.
"I do not feel comfortable that there has been an acceptable level of growth," said minority investor Sushil Jain in time allowed for comments at the AGM.
SIJL reported earnings per share of $2.27 in 2007 and $3.19 in 2016, but Jain said EPS actually fell over the decade when factoring for currency depreciation.
"In 10 years if you double the profit in Jamaican dollars, it still doesn't look like adequate growth," he said.
Mitchell, in response, said that SIJL earnings should be viewed within the context of the company's resilience to government shocks.
"Over the last 10 years, the environment has changed significantly. We have been proactive in adjusting our business model. Back in 2007, then 90 per cent of our income came from net interest income," said the Scotia CEO.
"You will recall that interest rates were high and the spreads were high. But there was significant risk involved. Again, you will recall that we had two debt exchanges," Mitchell continued, "So generating revenues for a business, we have to, as an organisation balance the various risks. The absolute returns are great, but you have to take into context the risk."
Over the decade, Scotia Investments made its highest profit of $2.1 billion in 2009 and its lowest of $1.02 billion in 2015.
"So you would have seen the transition in 2015 when we had the lowest income and, year-over-year, we have seen a handsome growth and our strategies will be to continue to drive that business model," said Mitchell.