May 2011 Financial News

Scotia Jamaica posts profits of J$2.8 billion for the second quarter

May 27, 2011

Scotia Group has announced net profits of J$2.8 billion for the second quarter ended April 2011, a four per cent increase over the corresponding prior year's quarter of $2.7 billion.

The performance came amid a 13 per cent decline in revenues, which was offset by increases in operating income which amounted to $7.5 billion for the quarter. This was led by a 27 per cent increase in net fees and commission income, which came in at $1.2 billion for the quarter and foreign exchange trading gains of $279 million.

The $95 million increase in profits for the quarter under review, is also $66 million above the previous quarter ended January 2011.

Bruce Bowen, Scotia Group president and CEO, attributed the performance to "strategic imperatives" that included reduced loan rates and new product launches.

"We continue to be focused on strategic imperatives that will drive long term growth and value for our shareholders," said Bowen. "As such, we continue to lead the industry in reducing lending rates and over the past month launched the Productive Sector Growth Fund II, in an effort to support economic growth and increased production in Jamaica," he added.

Scotia Group currently has the lowest lending rate on mortgages at 10.75 per cent, after the government run National Housing Trust (NHT), which offers rates between one per cent and seven per cent for mortgages. Effective May 1, 2011, Scotiabank also reduces its Base Lending Rate by 100 basis points to 15.75 per cent, the third reduction since June 1, 2010 and the lowest in over 27 years. The Productive Sector Growth Fund II has an additional $500 million in total to which businesses within the manufacturing, agriculture, tourism, export and distribution sectors can get access at a rate of 8.95 per cent on amounts up to $20 million.

Scotia Investments Jamaica Limited (SIJL), the wealth management arm of the Scotia Group, also saw an improvement in profits for the quarter of 131 per cent, to end the three months at $466 million. Despite a 19 per cent decline in revenues when compared to the corresponding quarter of 2010, SIJL's profits was bumped by a 63 per cent increase in net fees and commissions income. At $161 million for the quarter under review, net fees and commission income was 62 million above that of the prior year's corresponding quarter.

Anya Schnoor, CEO, SIJL noted the importance in the income stream to the institution's performance. "We have built on the solid performance of the first quarter and our results to date continue to be driven by strong growth in fee-based revenue, well managed interest margins in a declining interest rate environment and strong expense management," Schnoor said.

Other revenues increased by $2.7 million, 349 per cent over the $767,000 of the prior year's corresponding quarter to bring total operating income to 996 million for the April 2011 quarter.

Overall performance was bolstered by a six per cent in operating expenses.


Source:
Alicia Roache
Jamaica Observer
Friday May 27, 2011

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