The finance and insurance industry was the only one to have escaped contraction during the July to September quarter after growth in revenues for most deposit-taking institutions kept its output buoyant over that period.

“Real value added in the finance and insurance services industry grew by one per cent. This out-turn was attributed to greater revenues earned at deposit-taking institutions from net interest income, fees, and commission,” Planning Institute of Jamaica (PIOJ) Director General Dr Wayne Henry said during his presentation of preliminary estimates on Wednesday.

Jamaica’s financial ecosystem made up of approximately 11 deposit-taking institutions supervised by the central bank has through a network of eight commercial banks, two building societies, and a building society continued to deliver commendable profit margins despite operating in a high interest rate environment.

The PIOJ has attributed greater revenues earned at deposit-taking institutions from net interest income, fees and commission for a 1 per cent growth in the finance and insurance industry during the July-Sept quarter.

In its latest financial report, large deposit-taking institutions the National Commercial Bank (NCB) for its full year ended September 30, 2024 recorded operating income of $120 billion — four per cent above that for the same period in 2023 coupled with a net profit of $23.3 billion, which was almost two-and-a-half times higher than that of the previous year. Aiming to get back to and even surpass pre-COVID profit levels when it delivered over $30 billion in earnings, the directors of the country’s largest bank said they will continue to tighten efficiency as they move to achieve this objective by 2026.

On the other hand, Scotiabank, as the second largest, at the end of the third quarter ended July, raked in an operating income of almost $15 billion followed by a net profit of $5.4 billion. This while its consolidated nine-month income climbed to $43.4 billion with strong net profits of $13.9 billion.

The finance sector’s output, though 0.5 percentage points less than that for the comparable period in 2023, was the sole industry to have recorded growth as all other sub-industries under services recorded a decline, except for government services which returned flat. Output from the segment in the previous April to June quarter was 2.4 per cent. The performance by this industry took place against the backdrop of a macroeconomic environment which also saw a quarterly inflation rate of 3 per cent and fiscal deficit of $28.2 billion.

The local economy, ravaged by the passage of Hurricane Beryl and other hydrological events over the third quarter period, saw mass fall-outs across almost all industries, with major ones such as agriculture, mining, electricity and water supply, construction, and tourism leading the declines.

Following downturns of 6.5 per cent for the goods producing industry and 1.2 per cent for services, real value added for gross domestic product fell 2.8 per cent, reversing some 12 quarters of growth since the novel coronavirus pandemic.

With the prospects for the economy remaining largely negative, the PIOJ in its outlook said the projection is for output to further contract for the remainder of this calendar and fiscal year.

“For October to December 2024, it is projected that the change in real value added will be within the range of -1.5 per cent to 0.0 per cent, resulting in calendar year out-turn (January to December 2024) within the range of -1.0 per cent to 0.0 per cent,” the director general said.