Fri | Jun 5, 2020

Scotia Group reports small uptick in annual profit

Published:Thursday | December 6, 2018 | 12:00 AM
Headquarters of Scotia Group Jamaica on the waterfront in Kingston.

Banking conglomerate Scotia Group Jamaica Limited recorded a soft fourth quarter, but still closed the year with marginally higher profit of $12.8 billion.

Those results were just 2.6 per cent better than last year, when Jamaica's number two bank made $12.4 billion. Earnings per share for the full year totalled $4.10, up from $3.91 a year earlier.

The company also issued a final dividend of 51 cents per share payable on January 18, which is a larger distribution than the 48 cents per share than it paid in the first three quarters. Dividends for the quarter will amount to just under $1.59 billion.

Scotia Group in its quarterly earnings report, released to the market on Thursday, said customers can expect a more modern banking feel in branches going forward, including its head office on the corner of Duke and Port Royal streets in downtown Kingston.

"In the 2019 fiscal year, we will be increasing investments in our branch operations," said President and CEO David Noel in a statement that accompanied the financial report. Noel will speak in more detail about the bank's results and plans at a briefing scheduled for today, Friday, at the bank's Scotiabank Centre headquarters.

"On completion, the new head office branch will be a world-class facility, and a first of its kind in Jamaica," he said.

The bank is locking down its branch at King Street in Kingston and will merge those operations with the Scotiabank Centre branch. Its plans also include branch renovations and continued investment in digital technology to modernise its services.

As part of the bank's restructuring, its life insurance business is also to be sold to Sagicor for US$144 million.

Scotia Group made a $1.6-billion profit in the fourth quarter, which was less than half the $3.4 billion reported in the same period in 2017.

Explaining the dramatic drop, Scotia Group said: "The quarter- over-quarter results were negatively impacted by foreign exchange revaluation losses, gains on the sale of investments in the third quarter and not repeated in the fourth quarter, accruals for one-time structural transformation costs, as well as increases in fraud losses for the fourth quarter."

The full year's revenues at $40.3 billion narrowly beat the $39.5 billion earned a year earlier. Loans grew by 10 per cent to $16.1 billion, while shareholders equity grew to $115.6 billion, up 13 per cent year on year.

Noel characterised the year as one of "solid performance.

"We saw strong performances in retail, small business and commercial portfolios. Revenues from foreign exchange activities along with good underlying expense management were the other drivers of performance," said the bank president.

"These were offset by interest rate headwinds, especially on our investment portfolio," he said.