SCOTIA DBG Investments will rationalise its branches in May Pen, Ochi Rios and Savanna-la-Mar effective February 26, in order to increase efficiency at the investment bank.

The company will cut May Pen and Ocho Rios but reorganise the Savanna-la-Mar branch as a sub-branch of its Mandeville office. It will result in a four branch and sub-branch operation with additional investment advisors in 26 of the 40 Scotiabank locations islandwide.

“This branch rationalisation exercise is a result of a careful assessment of the overall efficiency of the Scotia DBG branch network,” stated a release from Scotia DBG. “To minimise inconvenience to clients normally serviced by these locations, Investment Advisors will be placed at representative offices at the closest Scotiabank branch. In addition, Scotia DBG clients can continue to be serviced through remaining Scotia DBG branch network in other key locations.”

The company’s branch cuts follows last month’s admission that the Jamaica Debt Exchange would affect its net interest income in the short term. “While the transaction will have a negative impact on the net interest income earned by Scotia DBG Investments Ltd in the near future, the impact on equity is a reduction of approximately J$94 million 1.15 per cent. Our key capital adequacy ratios will remain significantly above the regulatory requirements after the transaction is completed,” it stated.

Scotia DBG is largely dependent on investments in securities; of its total operating income of $3.9 billion for the year ended October 31, 2009, $3.36 billion was made from net interest income and $147 million gains from securities trading. The bulk of its total assets of $73.4 billion represent government securities at $47.8 billion and $15.1 billion in capital management and government securities fund.

Scotia DBG Investments reported $2.1 billion in net income for its 2009 October year end which was a 74 per cent increase over the $1.2 billion in the previous year. Net income for the final quarter amounted to $732.5 million up from the $485.5 million earned for the third quarter. Earnings per share for the year was $5.03 compared to $2.93 for last year. The company’s return on average equity improved to 30 per cent at the end of the financial year, indicating the company’s increased efficiency at generating earnings growth.