Sep 2007 Financial News

SBTT Releases Nine Months Results

Sep 03, 2007

Results for the Nine Months Ended July 31, 2007

For the Nine Months Ended July 31, 2007, Scotiabank of Trinidad and Tobago (SBTT) reported Earnings Per Share (EPS) of $1.52, up 18.75 per cent or $0.24 on the corresponding period in fiscal 2006. Q307 on Q306, this figure was up 13.04 per cent from $0.46 to $0.52.

Net Interest Income for the period under review amounted to $453.71 million, up 19.15 per cent or $72.92 million on the comparable period in the last financial year. Other Income was up by a smaller margin of 11.86 per cent from $129.46 million to $144.82 million. Thus, Net Interest & Other Income ended the Nine Months at $598.53 million, an increase of 17.30 per cent or $88.28 million on NM06. Q307 on Q306, this figure was up by 14 per cent from $181.77 million to $207.23 million.

Non-Interest Expenses saw a large increase of 37 per cent or $79.43 million to end the period at $294.09 million. Salaries and Staff Benefits was the largest expense and stood at $119.31 million, up 17.60 per cent from $101.45 million for NM06. Premises and Technology was the next major expense, up a considerable 25.79 per cent or $11.60 million from $44.97 million to $56.57 million. Also increasing was Communications and Marketing, up 15.34 per cent from $18.44 million to $21.26 million. Loan Loss Expense however was the only expense to show a decline, moving from $4.71 million to $1.76 million- a considerable drop of 62.58 per cent on the same period in the last financial year. While Other Income rose 11.30 per cent to end the Nine Months at $50.20 million, up from $45.10 million in the comparable period in fiscal 2006. Thus, Income Before Taxation ended the period at $349.44 million, up 18.22 per cent or $53.85 million on the corresponding period in fiscal 2006.

The Effective Tax Rate for the period under review was 23.21 per cent compared to a Tax Rate of 23.73 per cent for the comparable period in fiscal 2006. As a result, Income After Taxation ended the period at $268.34 million, up 19.03 per cent or $42.90 million on the same period in the last financial year.

The Directors have resolved to pay an interim dividend of 21 cents per share (15.3 cents-2006) on October 01, 2007 to shareholders on record as at September 11, 2007.

The shares of SBTT last closed at a price of $28.00 on the local exchange. At this price and our Forecasted EPS of $2.15, this share is trading at a price to earnings multiple of 13.02 times. Additionally, using a multiple 15 times and the Forecasted EPS of $2.15, this share has an expected return of approximately 15 per cent on the current price or a target price of $32.25. Thus, at this time we recommend a BUY on this share.


Gia Singh
WISE Equity Research Team