DESPITE the hurdles faced in Trinidad and Tobago (T&T) from the novel coronavirus pandemic, Scotiabank Trinidad and Tobago (SBTT) experienced a 25 per cent jump in net profit to TT$185.45 million ($4.32 billion) for its first quarter, a figure which exceeded pre-COVID levels of profitability.

This comes as the bank closes two branches and 149 workers are up for retrenchment next month in the twin island republic. Net interest income declined by four per cent to TT$305.64 million ($7.13 billion) as a result of interest rate compression and lower loan balances from the restrictions imposed for most of 2021. Due to the 37 per cent growth in other income, total revenue climbed by eight per cent to TT$474.92 million.

“We have already begun to see some recovery in our loan demand across the various segments. We do anticipate this will continue to occur once the recovery continues. Obviously, oil prices are something to make variations, but at this time, we have already begun to see that recovery phase. We would have been engaged in a number of cost control strategies during 2021 that would have reduced our cost profile gradually from our reporting Q1 2021 to Q1 2022,” stated chief financial officer of SBTT Reshard Mohammed at the bank’s virtual annual general meeting held last Wednesday.

Apart from the 25 per cent reduction in impairment provisions to TT$17.19 million, non-interest expenses fell by 13 per cent to TT$173.48 million. This has been facilitated by the overall group’s shift to digital services as 67 per cent of its customer base are enrolled on digital platforms and more services are consolidated throughout the region. Collections have shifted to the Dominican Republic affiliate which its ultimate parent company Scotiabank Canada has 97.44 per cent ownership.

Though net interest income spreads remain compressed, the retail, corporate and commercial banking segment saw a 36 per cent rise in income before taxation (IBT) to TT$247.42 million. While insurance services saw a slight reduction in IBT to TT$33.34 million, asset management recorded a 169 per cent jump to TT$3.48 million which was driven by sales rather than a more gradual recovery in asset prices.

“It would be an element of an improvement in the recovery of prices, but the biggest element contributing to growth in assets under management is the actual growth from a sales perspective. We have placed renewed focus on that segment as we see it as a very important product offering to our customers and is a major growth from the volumes coming in,” Reshard added.

As part of its digital push and enhancing its customer service, SBTT is launching a new foreign exchange (FX) trading platform for its commercial clients to process FX transactions. This is being done alongside the enhancement of products by its insurance subsidiary and improvements to the Scotia Caribbean mobile app.

“A new international foreign exchange trading platform which allows clients to execute FX trades in a secure manner via an online platform. We are the only bank to invest and develop our very own inter-payment gateway ICT solution. We’ve been listening to our customers feedback and continue to invest in solutions to meet their needs. This will have clients grow revenue as they can now seamlessly integrate transaction capabilities into their website and immediately accept payments from anywhere in the world. The FX trading platform is a commercial product and it’s not done in conjunction with other Caribbean countries. Certainly, exciting times ahead,” stated managing director of SBTT Gayle Pazos.

Total assets marginally grew to TT$27.72 million ($646.47 billion) which was due to the TT$4.05 billion in Treasury bills and TT$16.29 billion in loans. Total liabilities and shareholders equity closed the period at TT$23.45 billion and TT$4.28 billion, respectively. SBTT will pay a dividend of TT$0.65 totalling TT$114.62 million on April 12 to shareholders on record as of March 28. The first-quarter performance saw SBTT’s share price rise by five per cent to TT$78, which is its highest price to date.

SBTT’s recovery comes against the backdrop of the Caribbean and Central America segment of its parent seeing a 102 per cent rise in net income to CA$100 million ($12.01 billion) for the quarter. The segment experienced a four per cent reduction in total revenue to CA$508 million.

“In closing, I want to thank our employees for their ongoing efforts to build a sustainable bank, as well as our customers for their loyalty and trust. Thanks also to your shareholders for your confidence in the bank, and our chairman and board for their wise counsel and support of our strategic agenda,” Pazos said.