Avia Collinder, Business Reporter
Jacqueline Sharp, president and CEO of Scotia Group Jamaica Limited, is banking on business growth, despite expectations that the local economy will remain weak in 2014.
Her outlook on the periods ahead follows record profit at the bank of $11.9 billion at yearend October 2013 - a performance delivered by the group notwithstanding that, as one of the biggest creditors of the Government, it swapped more than $119 billion of GOJ bonds for lower tenors under the debt-exchange programme.
Scotia Group, which includes investment, building society and insurance subsidiaries, disclosed immediate losses of $397 million and capital loss of $1.35 billion as a result of the swap.
Sharp said she would continue to focus on operating efficiencies in order to improve shareholder returns.
"Overall, economic growth will continue to be weak, however we will continue to focus on growing our core business lines while we execute strategies to improve operating efficiencies," Sharp told Wednesday Business.
Business growth in 2013 resulted from a similar strategy, with notable improvements in the bank's consumer loans and mortgage portfolios.
Sharp said that for the year just ended, treasury, insurance and investment business lines were impacted by participation in the National Debt Exchange and Private Debt Exchange executed in February and March.
"In addition to immediate realised losses on the exchange, we earned lower interest incomes on the new bonds for the remainder of the year," Sharp said on Monday.
For the year, interest income was flat but the bank maintained earnings, she said, by focusing on its core lending business.
The best-performing segment for the group was its retail banking arm, which saw a nine per cent improvement in revenue to more than $14 billion. The segment contributed $4 billion to profit.
"We were challenged by general market and economic conditions as yields on our earning assets declined and liquidity tightened in the system. Our customers were also affected by the downturn in the economy. Notwithstanding, our strategy of achieving sustainable revenue growth saw us placing emphasis on growth in our core lending business, as well as our asset management and insurance business," said Sharp.
"We focused on acquiring new customers and deepening the relationship with existing customers, and we continued to work closely with our borrowing customers who faced difficulties as a result of the challenging economic times."
The banker said the retail banking division grew its loan portfolio significantly during the year "as a result of competitive pricing and solid execution by the sales team."
The group's loan portfolio closed the year up $13 billion at $134.8 billion.
The group's investment arm, Scotia Investment Jamaica, also recorded growth from new unit trust and mutual fund products.
"Scotia Group has for a number of years been pursuing a strategy of growing off-balance sheet assets through Scotia Investments, and so has been enhancing and adding new unit trust and mutual fund products over the last couple of years. We have seen growth in this business line in 2013 as assets under management at Scotia Investments — including the company's custody book — grew by 16 per cent year-over-year," said the Scotia Group president.