SCOTIA Group Jamaica posted net profits of $2.5 billion for the second quarter ending April 30, 2010, an 11 per cent decline from the corresponding period the year prior.

During the period, earnings per share (EPS) was $0.82, compared to $0.90 last year.

Total Revenue, comprising net interest revenue and other income, was $15.8 billion — an increase of 6.8 per cent from the prior year — over the period, which included two months of lower yields on securities due to the impact of the Jamaica Debt Exchange (JDX) which was finalised in February 2010.

Interest income was down 17 per cent to $8.5 billion. But net interest income was $12 billion, up $238 million when compared to last year, which the firm said was due to strong growth in earning assets, as interest margins have contracted due to significantly lower market interest rates subsequent to Government’s debt swap.

In a press release on Thursday, Scotia president and CEO Bruce Bowen said, “The performance of the Group during this time of unprecedented change and challenge within the economy should reassure all our stakeholders of the continued strength of Scotia Group. Our specific strategies employed to aggressively grow earning assets volumes resulted in another successful quarter, despite the significant reduction in yields on our investment portfolio this quarter.”

Non-performing Loans at April 30, 2010 totalled $3.9 billion, up $335 million over April 30, 2009, and $242 million above the previous quarter ended January 31, 2010. The year-over-year increase, Scotia said, reflects the financial difficulties being faced by borrowers, especially retail loan customers. But the firm added that the Group is applying strong credit risk management measures, in an effort to minimise the growth in non-performing loans. Scotia Group’s non-performing loans now represent 3.99 per cent of total gross loans and 1.21 per cent of total assets compared to 3.8 per cent and 1.16 per cent respectively one year ago.

Total assets increased year over year by $17 billion or 5.5 per cent to $324 billion as at April 30, 2010. The Group’s loan portfolio totalled $94 billion, up $1.6 billion over the previous year, with growth reflected mainly in the commercial loan portfolio. Investments and pledged assets also increased by $14.9 billion. Customer liabilities (deposits, repurchase liabilities and policyholder’s funds) grew to $254 billion, up $5 billion from the previous year, which the firm said reflects confidence in Scotiabank despite challenging market conditions.

The board of directors last week approved a second interim dividend of 37 cents per stock unit payable on July 8, 2010, to stockholders on record at June 16, 2010.