J$10.7b profit halts Scotia's trajectory
Published:Friday | November 26, 2010 | 12:00 AM
Correction
National Commercial Bank of Jamaica made net profit of J$11.07 billion and not J$11.7 billion as was reported in today's story.
Scotiabank also retains the record for the largest annual profit of J$11.6 billion.
We regret the error
_______________________________
Every year for well over a decade, Scotiabank Jamaica has improved on its profits - except for this one.
Yesterday, the banking group posted annual profit of J$10.7 billion, down from J$11.6 billion at year end October 2009.
The fall of per-share earnings of J$3.34, from J$3.58, came on the back of a steep J$7 billion, or 17 per cent, decline in net interest income, from J$42 billion to J$35 billion.
Some J$2.9 billion of net profit was made in the fourth quarter, up from J$2.4 billion in the previous period, not-withstanding flat rev-enue of J$8 billion.
Scotia Group Jamaica will pay dividend of 37 cents per share on those results on January 6, amounting to a J$1.15-billion distribution.
"The performance of the group over the past year was impacted by the unprecedented Jamaica Debt Exchange (JDX) programme coupled with a weak local economy," said President and Chief Executive Officer Bruce Bowen in a statement appended to the financial report.
"Despite this, Scotia Group Jamaica has reported strong results and achieved some key objectives, including growth in market share in our core lending business and growth in our off-balance sheet fund-management business."
Scotia Group touted its expanding share of the unit market, now at 62 per cent, and growth in its insurance business, as positive signs for the banking group.
The majority of group profits, 48 per cent, while Scotia Jamaica Life Insurance Company Limited accounted for 37 per cent, and Scotia DBG, 9.5 per cent.
The bank has ceded pole position for yearly profit by a Jamaican company to National Commercial Bank, which posted profit of J$11.7 billion at year end September 2010 - a figure that also bested Scotia's peak of J$11.6 billion.
But Scotia still remains No. 1 in one of the most important areas of banking - loans.
Its portfolio has grown from J$92 billion to J$95.8 billion at a time when NCB's has shrunk to J$88 billion. Scotia is positioned to leverage even more gains in this area as the bank with the lowest prime lending rate on offer - 16.75 per cent - which takes effect December 1.
The heavier loan book, plus an J$11-billion increase in its investment portfolio, have driven the company's asset base higher, from J$316 billion to J$325 billion.
Its deposit base has grown from J$142 billion to J$146 billion during the cycle.