Scotia Group reports rare fall in profit
Scotia Group Jamaica reported a $100-million drop in quarterly profit, despite narrow revenue gains for the No. 2 banking group that announced a leadership succession a week ahead of the release of its financials.
The group made $3.29 billion in net profit for the July third quarter, compared to $3.4 billion a year earlier, while net revenue rose marginally to $9.79 billion from $9.42 billion a year earlier.
It is a rare fall in profit and comes as Scotia Group's biggest rival and market leader NCB Financial Group reporting double-digit gains year-on-year.
The big reason for the fall in July quarterly profit stems from the halving of net gains on foreign currency activities at $570 million, down from $1.2 billion a year earlier.
"As I hand over the leadership reins to David Noel, I am confident that we have the right strategy to ensure delivery of solid returns and increased long-term value for our stakeholders," said Scotia Group president and CEO Jacqueline Sharp, who will depart the bank at the end of October.
Sharp focused attention on Scotia Group's nine-month performance, indicating that both top line and profit both grew 7.0 per cent over that period.
"We continued to execute well on our strategic priorities to grow our core businesses, while creating a more efficient infrastructure for future growth. Our productivity ratio improved by 200 basis points year-over-year," she said in a statement accompanying the earnings report.
Over nine months, Scotia Group made net profit of $8.9 billion, up from $8.4 billion in the 2016 period.
The treasury segment recorded lower net profit before tax at $1.8 billion, compared with $2.2 billion a year earlier. All other segments increased net profit, including the retail division, at $4.3 billion; corporate, at $2.8 billion; investment management, $1.2 billion; and insurance, at $3.25 billion.
The group's total loan portfolio also showed no growth year-on-year, and was in fact slightly off at S163.88 billion, compared to $163.93 billion at July 2016. Total assets, however, grew from $473 billion to $501 billion.
Scotia Group will pay its regular interim dividend of 45 cents per share on October 25.