Thu | May 19, 2022

SJBS reports best performance in 17 years

Published:Wednesday | March 14, 2012 | 12:00 AM
Gladstone Whitelocke, general manager of Scotia Jamaica Building Society. - File

The acquisition of the mortgage portfolio of an unnamed company and rising demand in the middle- and high-income real estate markets led to record growth for Scotia Jamaica Building Society (SJBS) last year.

General Manager Gladstone Whitelocke says SJBS' mortgage loan portfolio grew 35 per cent last year, which he said was the best performance in the company's 17-year history.

The portfolio was valued at J$10.27 billion at year end October 2011 - up or 35.3 per cent from J$7.59 billion in 2010 - and grew by another half-billion to J$10.8 billion at December, according to central bank data.

SJBS, which is the third largest of four building societies, grew loans at 15 times the pace of the market in which it operates. Central bank data for the December quarter indicated that building societies as a class grew loans at an annual rate of 2.3 per cent.

25% growth targeted

SJBS hopes to maintain its pace of growth at a targeted 25 per cent this year by maintaining focus on mid- to high-income property buyers, Whitelocke told Wednesday Business.

The uptick in demand in those two segments, he said, had less to do with refinancing and more with professionals in search of new homes.

Last year, it was expected that a number of mortgagors would have negotiated new loan terms and lower interest rates with lenders after the government replaced the original three per cent stamp duty charge on refinancing transactions to a nominal J$100.

"Refinancing was just about nine per cent of portfolio growth. We realised that the competition was strong in the lower end of the market so we decided to target the upper end at price point J$15 million and above," said Whitelocke.

Scotia Jamaica's loans are priced at 10.75 per cent. Comparatively, new entrant in the mortgage-loan market, NCB is offering a single digit rate, 9.5 per cent.

"Mid-market demand is pretty strong. Some realtors have a waiting list," Whitelocke said. "Some people realise that real estate is the best investment ... . With rentals at US$1,200 to US$1,500 a month, you could easily be paying a mortgage instead. Couples are also getting, together, J$9 million in NHT funds at 11 per cent which makes it easier for them to secure combined mortgage funding."

The building society declined to disclose the party whose mortgage portfolio it acquired.

SJBS wrote J$2.7 billion of mortgage loans last year and reported net asset growth of 29 per cent, according to parent Scotia Group Jamaica. The mortgage subsidiary contributed 6.0 per cent to corporate revenues.

Net profit rose 19 per cent, from J$484m to J$578m.

Productive partnership

Whitelocke was upbeat, saying a strategic partnership with realtors and housing developers, including New Era Homes, developer of residential homes at Caymanas Estates in St Catherine, was highly productive.

"We have improved processing times so that realtors can get their commissions faster," Whitelocke said.

The building society sector is now valued at J$88 billion by loans, J$122 billion by savings or deposits, and J$185 billion by assets. Jamaica National remains market leader in the three categories, followed by Victoria Mutual, Scotia Jamaica, and FirstCaribbean.