Sun | Dec 17, 2017

Dividends flat at Scotia Group Jamaica

Published:Sunday | December 3, 2017 | 12:00 AM
Scotia Centre, corporate headquarters of Scotiabank Jamaica.

Minority shareholders in Scotia Group Jamaica (SGJ) can expect to receive flat dividends year on year, according to its Canadian parent annual report released last week.

It comes as Scotia Canada indirectly increased its stake in the local subsidiary operations during the financial year.

The Canadian parent indicated that dividends related to non-controlling interest remained stable at CA$17 million (J$1.7 billion) up to October 2017, its year end. Minority shareholders hold 28.2 per cent of SGJ valued at CA$300 million as at October 2017 versus US$311 million a year earlier. The report's management discussion did not additionally single out Jamaica for mention.

In June, Scotia Canada made an offer of $38 per share for all minority shareholdings in Scotia Investments, a subsidiary of Scotia Group Jamaica. It was done as a means of taking Scotia Investments private.

The annual report, however, did speak to the challenges faced by a number of Caribbean islands with regard to hurricanes Irma and Maria, which affected some of the region's territories in September and October. The impact of the hurricanes in the fourth quarter was, however, mostly offset by a gain on sale of a retail loan portfolio in the Caribbean region, stated Scotia.

The bank did not disclose the nature of that sale nor the territory. Asked whether that sale of retail loans related to Lasco Financial's acquisition of Scotia's micro-loans division in Jamaica, Hope McMillan, public and corporate affairs manager at Scotia Group Jamaica, said "the retail portfolio mentioned is, in fact, a reference to another regional transaction, not to the CrediScotia deal."

Brian Porter, president and chief executive officer, in his address to shareholders last week at an investors forum said "we are very pleased with the bank's results in 2017. Our team of 89,000 Scotiabankers have performed well to deliver these results, notwithstanding several catastrophic events that took place across our footprint."

In the Caribbean and Central America, provisions for impaired loans totaled CA$215 million versus CA$250 million a year earlier. The annual report, however, did not disclose the level of impaired loans for the region.

"An increase in the allowance for exposures related to recent hurricanes in the Caribbean was primarily offset by a reduction in the amount held against energy exposures," according to the financial report.

Concurrently, the Canadian bank stated that the Caribbean and Central America made total revenues of CA$3.03 billion, up two per cent, and net interest income increased by $20 million or one per cent. The bank is now celebrating its 185th year, which makes it older than independent Canada.

Overall, Scotiabank reported net income of $8.24 billion in 2017, compared with $7.37 billion in 2016. Diluted earnings per share (EPS) were $6.49, a 12 per cent increase from last year. Adjusting for the 2016 restructuring charge of $278 million after tax ($378 million pre-tax), net income and EPS grew 8.0 per cent.

"During 2017, we delivered strong results in all three of our businesses," Porter said in a release. "As well, the bank is making good progress on its digital strategy, with our digital factory network fully operational across our five key markets of Canada, Mexico, Peru, Chile and Colombia to collaborate, innovate and strengthen our customer experience and efficiency levels," he said.

steven.jackson@gleanerjm.com>