Scotia makes $4.9 billion over six months

Scotia makes $4.9 billion over six months

Tuesday, June 14, 2016

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Scotia Group Jamaica Ltd (BNS) reported group earnings of $3 billion and earnings per share of $0.95 for the three months ended April 2016 and, year to date, for the six months since the start of the financial year, net income of $4.98 billion and earnings per share of $1.57.

Year to date, earnings grew $1.13 billion or 29 per cent, compared to the similar period last year, based on higher loan volumes, particularly in residential mortgages, consumer and small business portfolios, it was reported. These, the group said, offset the reductions in net interest margins due to lower market interest rates and the competitive environment.

Revenues during the six months were $18.9 billion, an increase of $1.13 billion over the prior year, driven by increased volumes countering the impact of reduced margins and improved non-interest revenue.

Treasury contributed nine per cent of revenues, Retail Banking 47 per cent, Corporate Banking 21 per cent, Investment Management Services eight per cent, Insurance Services 13 per cent, and other sources two per cent.

Jackie Sharp, president & CEO, was quoted in the report as noting that the bank was engaged in restructuring its business amd keeping costs under control.

She stated,"We continue to focus on meeting our customers’ needs, while taking the necessary action to restructure our business and manage costs." She noted that total operating revenues for the Group increased $1.2 billion or seven per cent year over year, while operating expenses reduced by $311 million or three per cent.

She said the group was experiencing good volume growth in all business lines, and continued to have steady growth in its customer base.

Net interest income, after impairment losses for the six-month period, was $11.79 billion, or $401 million above the same period in 2015. This was primarily due to growth in net interest income of $372 million, resulting from lower levels of wholesale funding.

The Group reported reduced impairment losses on loans due to strong risk management. The Group’s aggregate loan loss provision as at April 30, 2016, was $5.1 billion, representing more than 100 per cent coverage of total non-performing loans.

Total assets increased year over year by $36.3 billion or 8.79 per cent to $450 billion as at April 30, 2016. Total customer liabilities represented by deposits, securities sold under repurchase agreements, and policyholders’ funds grew to $328.8 billion, an increase of $19.9 billion or 6.45 per cent compared to April 30, 2015.

Securities sold under repurchase agreements declined. As at the end of April 30, 2016, funds under management grew by 13.3 per cent to $117.5 billion year over year.

The group’s board approved a second interim dividend of 42 cents per stock unit payable on July 21 to stockholders on record at June 29.

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