Mar 2009 Financial News

Scotiabank enjoys strong position

Mar 04, 2009

A year ago, international market conditions and the global economic landscape were markedly different from what they are today, Scotiabank Group's Canada-based chairman Robert Pitfield recalls.

"At that time, there were troubles in global financial markets but the magnitude of the problems had not yet come into focus," he said.

The past 12 months have had a huge impact on the financial positions of thousands of companies in countries around the world.

But simple, yet effective strategies of sticking to "Banking 101" basics and staying conservative in investments have enabled Scotiabank in Canada and its operations in Trinidad and Tobago to stay ahead of the meltdown in other parts of the world.

Without question, there are challenges to address, Pitfield said at Scotiabank's annual general meeting in Port of Spain last week.

"Trinidad and Tobago is not immune to the global slowdown. A recession in the US impacts economic growth here directly, as this country's largest trading partner- but also indirectly, through its effect on other economies in the region," he said on Friday.

A day earlier, Pitfield told the Business Express at the bank's Port of Spain offices that while many countries were still feeling the effect of the overlending in the United States that led to a financial meltdown, it was only a matter of time before strategies that banks have put in place will start to work to reverse the trend.

"It will be a new day but it will take time," Pitfield said.

At the bank's AGM at the Hilton Trinidad, he reminded shareholders that Trinidad and Tobago was well positioned to withstand difficult economic conditions and solid fiscal management of energy revenues over the past several years has left public finances in good shape.

"The Government has shown prudence in scaling back spending in response to lower energy prices and decreased global demand," he said. "Yet, they have continued strong overall public investment which will keep the economy growing."

Scotiabank remains optimistic about its future in Trinidad and Tobago.

For its first quarter ended January 31, the Trinidad and Tobago operations posted an after tax profit of $119 million, up ten per cent from the comparable period a year earlier.

In 2008, the bank recorded after tax profits of $431 million.

Pitfield said that fundamentally, and relative to its peers, Scotiabank was strong.

He pointed to a report by international consulting firm Oliver Wyman that rated Scotiabank one of the top ten performing banks in the world during the recent credit crisis.

"We are well capitalised, we have a solid balance sheet, we are well diversified by business line, geography and products globally, and we have a strong risk management culture." Pitfield said.

Three of the bank's board members were re-elected to serve another three-year term at the bank's AGM last week.

George Janoura, chairman and managing director of Janouras Ltd Robert Riley, chairman of energy producer bpTT and Gisele Marfleet, director of operations at Industrial Chemical Supply (1995) Company Ltd were re-elected to serve on Scotiabank's Board of Directors.

Michael Anthony Fifi, former CEO of Home Construction Ltd recently resigned from the Scotiabank board.

When a shareholder questioned the bank's involvement in the financing of the delayed One Woodbrook Place housing complex which is being built by Fifi's former company HCL, Scotiabank managing director Richard Young let shareholders know that the public company was not associated with the project.

HCL is a member company of the CL Financial conglomerate which has turned to Government and the Central Bank for a financial rescue of several of its insurance subsidiaries.


Source:
Curtis Rampersad and Aretha Welch
Trinidad Express
Wednesday, March 4th 2009

http://www.trinidadexpress.com/index.pl/article_business_mag?id=161446830