Fees bolster Scotiabank income, earnings flat
Published:Sunday | August 28, 2011 | 12:00 AM
Scotia Group Jamaica Limited has delivered marginally higher nine-month profits than a year ago, and will reward shareholders with an interim dividend of the usual 37 cents per share.
Scotia Group made J$7.69 billion, or $2.47 per share, in the nine months ending July 31, up 1.8 per cent, or J$142 million year on year, from which it will distribute J$1.15 billion to shareholders on October 6.
Its primary wealth subsidiary, Scotia Jamaica Investments Limited, which made nine-month profit of J$1.4 billion, will also pay dividend of 33 cents per share, amounting to J$139.65 million, also payable October 6.
Scotia Group maintained profit performance against noticeable drop in net interest income by almost J$4.5 billion to J$22.7 billion. The lost ground was covered by a half-billion-dollar rise in fees and commissions - from J$2.9b to J$3.47b - resulting in a 1.7 per cent improvement in net revenue to J$22 billion.
The banking group said it would be launching new products "in the coming months" to re-energise its revenue.
President and CEO Bruce Bowen in a statement to shareholders of the listed banking group, said the loan portfolio is already strengthening.
"Scotiabank continues to lead the market in reducing lending rates, which has correspondingly led to the growth of our loan portfolio. This strategy evidences our commitment to supporting economic growth and increased production in Jamaica," Bowen said in a company-issued statement.
"In the upcoming months we will launch new products and services as we continue to focus on meeting the needs of our customers while driving growth and value for our shareholders," he said.
The bank's loan book now tops J$100 billion in value, net of J$4 billion of non-performing debt.
Loans up
Loans are J$6 billion above year-earlier levels.
The bank also reported a second quarter of decline, relatively small amounts, in its non-performing loan portfolio. Within the April quarter, Scotia Group recovered J$24 million of outstanding debt; and another J$178 million in the July quarter. The bad-debt portfolio now stands at J$4.045 billion.
"This reduction is due to recoveries made during the quarter, coupled with strong credit policy and loan-administration procedures, which have ensured stability in the portfolio," the bank said.
"Non-performing loans now represent 3.95 per cent of total gross loans compared to 4.17 per cent one year ago, and 4.2 per cent as at April 30, 2011."
The bank also reported a smaller write-off of bad debt this period of J$951 million compared to J$1.34 billion in the nine months ending July 2010.
The non-perfroming debt is fully provisioned.
The growth in the bank's loan portfolio and improved value of its financial investments pushed the bank's total assets to J$334.5 billion, or 2.68 per cent, in the nine months.