May 2012 Financial News

Scotia Investments' profits up 15%

May 30, 2012

SCOTIA Investments reported a 15 per cent increase in second-quarter net profit to $536 million, boosted by operational efficiencies and growth in non-interest income.

The wealth management arm of Scotiabank Jamaica posted total revenues of $1.06 billion for the three-month period ending April 2012, seven per cent more than the 2011 second quarter. A four per cent decline in net interest income to $705.7 million was offset by a 38 per cent jump in other revenues, including fee income, securities trading gains and net foreign exchange trading income, to $362.8 million.

"We have produced another solid performance for the second quarter. Fee-based revenues contributed significantly to this quarter's earnings," said Scotia Investments CEO Lissant Mitchell. "Product innovation and development continue to be major strategic imperatives for SIJL as we seek to further deepen the suite of investment options offered to our clients in assisting them to achieve their financial objectives."

"Our newly launched Scotia Premium Money Market Fund continues to show strong growth with over 100 per cent increase in net asset value during the quarter," added Mitchell, who succeeded Anya Schnoor as head of Scotia Investments in November.

Scotia Investments' bottom line was helped by ongoing cost management initiatives which reflected in a one per cent decline in operating expenses to $318.6 million over the period under review. The company's productivity ratio (operating expense/total revenue) — an important measure of cost efficiency —was 29.82 per cent for the April 2012 quarter compared to 32.37 per cent over the corresponding three months last year.

Earnings per share for the six months ended April 2012 was $2.45 compared to $2.20 for the first six months last year, the company reported, adding that its return on average equity stood at 19.47 per cent at the end of the period, down marginally from 20.31 per cent last year.

Meanwhile, Scotia Investments said it maintained its dominant position in the Unit Trust industry behind improved net asset values on managed funds, including the Scotia Premium Fixed Income Fund, Caribbean Income Fund and the newly launched Scotia Premium Money Market Fund. Against this background, the company reported assets under management climbing to $99.3 billion at the end of the second quarter, up $12.5 billion or 14 per cent above the corresponding period last year.


Source:
BY JULIAN RICHARDSON Assistant Business Co-ordinator richardsonj@jamaicaobserver.com
Jamaica Observer
Wednesday May 30, 2012

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