Scotia vs NCB: How the behemoths stacked up in 2011

Correction & Clarification

The graphic had the wrong P/E ratio data.
The correct information is 5.15x for NCB and 7.57x for Scotia group. We regret the error.

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Lavern Clarke, Business Editor

Scotia Group Jamaica may have lost its standings as top profit maker and largest asset base to unrelenting rival National Commercial Bank of Jamaica (NCB), but it still holds the edge in a business segment important to institutional strength - loans - with a portfolio pushing J$100 billion.

The Canadian banking group, with Bruce Bowen at the helm, reported a rise in its loan portfolio to J$99.976 billion at yearend October 31, 2011.

NCB group lags with J$91.728 billion at yearend September 2011.

However, the latter bank appears to have the momentum for while Scotia Group grew loans by J$4.16 billion or 4.3 per cent, NCB, which is run by Patrick Hylton, improved its portfolio by J$5.73 billion or 6.7 per cent.

The rivalry is also keen on the other end of the scale, in the deposit market, with both banking groups sporting almost equal portfolios — NCB, J$155.8 billion; Scotia J$155.1 billion. Those numbers, however, reflect a strong J$11 billion rise in deposits for NCB in the space of a year; whereas Scotia's deposit base actually shrunk by J$1.7 billion.

Bowen, in his market filing of the bank's yearend results, referred to 2011 as challenging year "for Jamaica", while touting areas where the bank made gains in its business segments.

In the one area where it contracted, the decline, although marginal, was sufficient for NCB group to claim pole position in the deposit market.

Scotia has long given up the number-one position as the bank with the largest asset base, but it reigns supreme in terms of its net worth, with J$63 billion of shareholder equity compared to J$61 billion for NCB.

The Canadian bank was also tops in an area important to investors, dividends. Not only did Scotia pay out more per share in annual dividends at J$1.48 per share relative to NCB's J$1.25, its total payout was higher at J$4.6 billion compared to NCB's J$3.08 billion.

In other words Scotia, which made J$10 billion in net profit, ended up sharing the equivalent of almost half of it with shareholders, and will pay out another J$1.15 billion, or 37 cents per share, in two weeks on January 19.

The Scotia stock also gives investors a bigger bang for the buck, with an estimated dividend yield of six per cent compared to four per cent for NCB.

NCB, whose bottom line hit a new record of J$13 billion, shared less than a quarter of its largesse with owners of the bank. And of the amount distributed, majority owner Michael Lee-Chin and his companies will sop up more than 63 per cent, or just under J$1.95 billion.

In the case of Scotia Group, its parent, BNS Canada got close to 72 per cent amounting to J$3.3 billion of dividend paid in the year.

Jamaica's commercial-banking sector consists of seven players. The most current central bank data continues to affirm NCB and Scotiabank's dominance of the sector with more than 70 per cent share between them.

Going forward, Scotia Group said Wednesday that it plans to "aggressively develop" its loan portfolio by going after business in the mortgage and micro-loan sectors, creating "unique financing options" for government agencies and corporate clients, and expanding its distribution channels.

lavern.clarke@gleanerjm.com

 How the big banking groups compare: