Scotia Group Jamaica Limited (SGJ) for the nine months ended July 31, 2017 reported an improvement in net interest income to $19.93 billion, moving from $18.78 billion for the corresponding period in 2016, while Interest Expenses declined by 11% to total $3.33 billion (2016: $3.76 billion). Interest income for nine months amounted to $23.26 billion, a 3% increase relative to $22.54 billion booked for the comparable period in 2016. Interest Income for the quarter increased 4% from $7.57 billion in 2016 to $7.86 billion. Interest expense for the quarter fell 8% to close at $1.10 billion (2016: $1.19 billion), resulting in net interest income climbing 6% to $6.76 billion (2016: $6.38 billion). According to SGJ, “the positive movement was achieved through increased loan and transaction volumes across our business lines.”

Impairment Losses of Loans rose 30% to $1.48 billion compared to $1.14 billion for the comparable period in 2016. SGJ stated, “we experienced higher write‐offs on our unsecured retail portfolio, however the overall quality of the loan portfolio has improved, with a reduction in total non‐ accrual loans (NALs) from $4.5 billion last year to $4.3 billion as at July 31, 2017.” As such, Net Interest Income after Impairment losses on loans grew 5% to $18.44 billion relative to the $17.63 billion recorded for the corresponding period in 2016.

Total Other Revenue increased by 10% to $11.04 billion (2016: $10.03 billion) . See below for total revenue breakdown:

• Net Fees and Commission Income amounted to $6.59 billion (2016: $5.35 billion), an increase of 23% relative to the corresponding period in 2016. The performance according to SGJ this, “was driven by higher transaction volumes and the growth in our credit card, merchant services, and asset management business.”
• Insurance Revenue climbed by 22% and closed the period at $2.27 billion relative to $1.86 billion last year. SGJ noted, “growth in gross premium income for the individual product lines offered by Scotia Insurance, and actuarial reserve release from changes in valuation assumptions.”
• Net Foreign Exchange Trading Income declined by 36% and amounted to $1.67 billion (2016: $2.60 billion).
• Net Gains on Financial Assets rose to $447.80 million relative to $191.99 million.
• Other revenue grew from $26.99 million reported last year to $65.22 million, a 142% improvement.

Gross operating income for the nine months amounted to 34.30 billion compared to $32.27 billion reported in 2016.

Total Operating Income for the nine months increased 7% to total $29.48 billion versus $27.67 billion for the corresponding period in 2016.

Total Operating Expenses for the nine months ended July 31, 2017 amounted to $16.12 billion, a 3% growth from the $15.59 billion booked for the corresponding period in the prior financial year Expenses for the quarter moved from $4.77 billion in 2016 to close at $5 billion, a 5% growth year over year.  Under operating expenses:

• Salaries and Staff Benefits increased to close the period at $8 billion (2016: $7.81 billion).
• Property Expenses (Including Deprecation) grew by 5% amounting to $1.57 billion (2016: $1.49 billion).
• Amortization of Intangible Assets increased 2% to closed the period at $95.25 million versus $93.32 million in 2016.
• SGJ reported $1.07 billion for asset tax, 12% more than the $956.45 million documented for nine month ended July 2016.
• Other Operating Expenses increased by 3% and closed the period at $5.38 billion relative to $5.23 billion.

Profit before Taxation totalled $13.36 billion; this represents an increase of 11% from the $12.08 billion recorded in 2016.

Tax charges for the nine months totalled $4.37 billion (2016: $3.71 billion), as such Net Profit for the period totalled $8.99 billion, 7% more than the $8.37 billion posted for the same period in 2016. Net profit for the third quarter slid 3% to $3.30 billion relative to $3.40 billion reported in 2016.

Profit Attributable to Shareholders amounted to $8.81 billion, 7% more than the total of $8.20 billion a year earlier. For the quarter, profit attributable to shareholders totalled $3.21 billion compared to $3.21 billion booked for the comparable quarter last year.

Earnings per share (EPS) for nine months totalled $2.83 (2016: $2.64), while the EPS for the quarter amounted to $1.03 (2016: $1.07). The trailing earnings per share amounted to $3.93. The total number of shares employed in our calculations amounted to 3,111,572,984 units.

Total comprehensive income attributable to equity holders of the company amounted to $9.33 billion relative to $9.35 billion reported a year earlier. For the third quarter, SGJ reported total comprehensive income attributable to equity holders of $3.37 billion (2016: $3.62 billion).

 

Balance Sheet Highlights:

As at July 31, 2017, the company’s assets totaled $501.18 billion, 6% more than its value a year earlier. The increase in total assets was primarily driven by increases in ‘cash resources’ by $31.03 billion to a total of $134.13 billion (2016: $103.11 billion). SGJ indicated this was, “due to increased liquidity from inflows of retail and commercial deposits. We continued to maintain adequate liquidity levels to enable us to respond effectively to changes in cash flow requirements.” Notably ‘Loans after making provision for loan losses’ and ‘Investments Securities’ declined year over year to $163.88 billion (163.93 billion) and $113.17 billion (2016: $117.15 billion) respectively.

SGJ’s shareholders’ equity at the end of the nine months amounted to $96.99 billion relative to the $90.69 billion recorded in the prior year’s corresponding period. Consequently, the book value per amounts to $31.17 (2016: $29.14).

 

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