Jun 2012 Financial News

Scotia posts $268.7M profit

Jun 05, 2012

Scotiabank Trinidad and Tobago (TT) has recorded a half year net profit of $268.7 million for the period ended April 30, 2012. That’s an after tax increase of 2.4 percent over the comparative period in 2011.

Dividends for the period remained flat at $0.64 per share and represented a distribution of 42 percent of after tax profits. Earnings per share (EPS) stood at 152.4 cents as at April 30th 2012, however Return on Assets (ROA) and Return on Equity (ROE) both decreased slightly.

ROA dropped from 3.23 percent last year to 3.15 percent in 2012 while ROE went from almost 21 percent in the first half of 2011 to almost 19 percent this year. The directors attributed the group’s “solid half year results (of) sustained profitability and growth to its pro-active treasury management and credit risk and expense management philosophies.”

According to the directors, these results were achieved in a highly competitive and challenging environment as Scotiabank “continues to manage the effects of excess liquidity, historically low returns and a limited supply of high quality investment opportunities.”

Despite the excess liquidity “overhang” from 2009 and low demand for new credit, Scotiabank realised growth in Net Interest Income of 2.05 percent or $9.3 million over the prior year. Net Interest Income as at April 30, 2012 was $462 million compared to 2009, when it was $452.7 million. How was this growth achieved?

The bank said the primary reason for this was the redeployment of excess liquidity by its Treasury Unit, which “actively sought and acquired high quality investments.”

Insurance subsidiary, ScotiaLife Trinidad and Tobago Limited, continued to generate positive growth even as traditional corporate, commercial and retail lending business lines continued to be negatively impacted by reduced credit demand. The group’s merchant banking and wealth management divisions were affected by a lack of capital market activity which persisted during the first half of fiscal 2012.

Loan loss expenses fell by 67.7 percent or $22.1 million, mainly due the bank said, to the strategic management of its portfolio of delinquent loans. This was assisted by an improvement in local economic confidence.

Net loans to customers, which accounts for 58.9 percent of total assets, declined versus the previous year by $351.5 million or 3.3 percent, as scheduled pay-downs continued to outstrip the value of new loans booked for the period.

In contrast, deposits, which represent 88.9 percent of total liabilities, stood at $12.8 billion as at April 2012.

Growth was recorded at $860.9 million year over year as depositors continue to seek stability rather than reward.


Source:
Newsday
Tuesday June 5, 2012

http://www.newsday.co.tt/business/0,161260.html