Business

Scotia's bottom line improves

Friday, August 31, 2012    

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SCOTIA Group Jamaica increased third-quarter profits by three per cent to $2.5 billion over the period ending July 31, 2012.

The results were achieved behind a nine per cent year-over-year growth in operating income to $7.9 billion, while operating expenses increased by five per cent to $3.9 billion.

"Over the past quarter all of our business lines produced solid results which translated to an increase in our pre-tax earnings compared to the previous quarter," said Scotia President and CEO Bruce Bowen.

Scotia's diversified operations include banking, investment management and insurance services.

Net interest income after impairment losses of $5.6 billion over the July 2012 quarter was seven per cent higher than the comparative period last year. Net fee and commission income rose by 12 per cent to $1.3 billion, insurance revenue jumped by 31 per cent to $546 million, and net foreign exchange trading income of $394 million represented a 39 per cent increase year-over-year. "All of this has been achieved while improving our productivity ratio through close management of operating expenses," Bowen said.

Salaries and staff benefits fell by six per cent to $1.9 billion over the review period compared to the same three months last year. Other operating expenses, however, spiked by 24 per cent to $1.4 billion.

Total assets increased year over year by $13.8 billion or 4.13 per cent to $348 billion as at July 31, 2012. Bowen said loan book growth over the period — by $15.9 billion to $116.3 billion — was driven by solid growth in both the retail and commercial portfolios.

"Total loans in the bank and building society grew by 15 per cent year over year in keeping with our strategy to refocus our balance sheet to private sector lending," said Bowen.

Scotia Group's Non Performing Loans (NPLs) have been reduced to 3.58 per cent of total loans compared to 3.95 per cent last year. NPLs at July 31, 2012 totaled $4.23 billion, reflecting an increase of $187 million above prior year, and a reduction of $1.24 billion from the previous quarter ended April 30, 2012, the company said, noting that the reduction from the previous quarter was due primarily to the recovery on a large corporate loan that was classified as non-performing during the four quarter of 2011.

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