CLARKE
SCOTIABANK HAS reported its ninth consecutive year of increased profits with net income for the 2005 fiscal year of $5,886 million. For the fourth quarter net profit was $1,597 million an increase of $335 million when compared to the same period last year.
"Our fourth quarter and full year results reflect the strength of our well diversified business lines," said William E. Clarke, president and chief executive officer in a statement. "Scotia-bank continues to achieve high quality solid earnings, despite the low interest rate environment, as we remain focused on our core business to achieve long term sustainable growth.
CORE BUSINESS
Scotiabank's policy of leveraging the brand with emphasis on core business prohibits engagement in highly speculative trading in equities, fixed income securities and foreign exchange."
Such practices result in erratic earnings, which are inconsistent with prudent banking practices, he said. Strong growth in retail banking continues to be a key contributor to the bank's performance.
During the year the Scotia Wheels initiative, Scotiacard Simplify campaign coupled with growth in credit card volume and fee income were major contributors to retail banking profits. Scotiabank continues to be the industry leader in credit cards, holding the number one position in market share in outstanding balances.
The Board of Directors at its meeting held on Thursday approved an interim dividend of 25 cents per stock unit, payable on January 5, 2006 to stockholders on record at December 14, 2005. This dividend will take the year to date distribution to $1.00 compared to $0.925 cents paid last year.
REVENUES
Total revenue comprising net interest revenue and other income was $17, 527 million. While there was a marginal reduction in net interest revenue (consistent with the reduction in market interest rates), other revenue increased by 33%. This was fuelled by strong growth in foreign exchange trading profit, credit card revenue, and other retail fees.
Net interest income was $14,064 million, down marginally by $47 million from last year. There was strong portfolio volume growth which would otherwise have resulted in a considerable increase in net interest revenue, however, there was a reduction in net interest margin occasioned by the significant reduction in market interest rates which resulted in an overall reduction of $47 million year over year.
