Scotia Group Jamaica Limited (SGJ) has become the largest banking mortgage provider in Jamaica as its residential mortgage portfolio has grown to $107 billion (US$671 million).

This was revealed on Friday at Scotia Group’s second quarter (February to April) media briefing where it was noted that mortgages were up 24 per cent year on year. Scotia Group’s consolidated residential mortgage book has grown considerably since October 2019 where it stood at $37.34 billion to $97.84 billion at the end of 2024. The new peak achieved at the end of April means that the Scotia Group now surpasses the VM Building Society and JN Bank Limited whose core businesses revolve around mortgages. The National Housing Trust held $279.03 billion in mortgages as of March 2024.

“We have a large network of branches. We cover the entire country, we have full services across multiple channels, we have grown our core deposit book of clients and now have close to 850,000 clients. We also have the liquidity to support asset growth. That comes with also having the mortgages priced at a rate that clients find attractive. So, those are some of the elements that have contributed to this significant growth that we’re seeing in our mortgage book,” said SGJ President and Chief Executive Officer Audrey Tugwell Henry on the factors that support the overall mortgage growth.

The Bank of Nova Scotia Jamaica Limited (BNSJ) or Scotiabank Jamaica publishes the loan rates on its Scotia Plan personal loans on its website. The rates quoted for mortgages was 8.50-12.49 per cent. Up to late 2024, BNSJ quoted a flat 8.99 per cent rate for mortgages before introducing ranges on all of its loans. The mortgage rate was 8.49 per cent in January 2023, 6.99 per cent in January 2022 and 9.25 per cent in May 2020.

The single digit interest rate offering combined with growing property demand across Jamaica fuelled BSNJ’s push to become a large mortgage player. The increase in mortgage interest rates at the other mortgage players resulted in some clients moving their mortgage under the mortgage switch to BNSJ along with their other business activities.

BNSJ has the cheapest cost of funding in Jamaica with the bank paying less than one per cent in interest relative to its $470 billion deposit base in 2024. BNSJ’ net interest income margin was 92.83 per cent in 2024 which meant it only spent $0.07 in interest on its funding sources relative to every $1 of interest income generated. BNSJ’s loan to deposit ratio at the end of October 2024 was 63.70 per cent which means there is space on the balance sheet to increase lending.

The growth in the residential mortgage book is largely taking place at BNSJ whose loan book grew from $11.60 billion in 2019 to $83.59 billion in 2024. The Scotia Jamaica Building Society has seen its residential mortgage book decline from an estimated $25.73 billion in 2019 to $14.31 billion in 2024.

While the Scotia Group CEO was proud of the team efforts in growing the mortgage book, she still lamented the manual process in Jamaica which makes mortgage disbursement take longer for clients.

“We have a standard that we’re working towards and honestly, it can be difficult sometimes because the mortgage process in Jamaica is 100 per cent manual. Everything is driven by paper, all the interactions with government agencies is passing paper across the agencies. Internally, we have quite a bit of automation, but we try work towards to those 60 to 90 days,” she added.

According to Bank of Jamaica (BOJ), loans by deposit taking institutions six per cent over the last year from $1.45 trillion in March 2024 to $1.54 trillion to March 2025, with $1.36 trillion held by commercial banks. Residential mortgages increased 15 per cent to $483.29 billion over that same time period which meant Scotia Group has 22 per cent of the market share.

Scotia Group’s consolidated loan book grew four per cent over the six months period (November to April) from $312.76 billion to $323.88 billion. BOJ data showed BNSJ’ loan book at $308 billion as of March 2025, with net loan growth for the January to March period at $10.29 billion which was the highest amongst the eight other commercial banks.

This continued loan book growth resulted in SGJ’s consolidated Q2 net interest income rising seven per cent to $12.03 billion. Although expected credit loss provisions were down by more than one-third, a decline in net fee and commission income and other revenue resulted in total operating income rising seven per cent from $14.58 billion to $15.60 billion.

Total operating expenses grew 23 per cent from $6.78 billion to $8.33 billion as salaries and staff benefits increased 19 per cent to $3.52 billion while other operating expenses increased 24 per cent to $4 billion due to higher cash transportation costs and recent investments in technology. Higher expenses resulted in profit before taxation (PBT) declining seven per cent to $7.27 billion with consolidated net profit decreasing eight per cent to $5 billion. Earnings per share (EPS) moved from $1.74 to $1.61.

With Scotia Group following the four-pillar strategy set by Bank of Nova Scotia CEO Lawren Scott Thomson, the group is working on making it easier for clients to do business with them. The life insurance business is seeing greater migration of client activity to digital channels with the Scotia Access portal in the Scotia Caribbean mobile application facilitating that initiative. Although Scotia Investments Jamaica Limited CEO Sabrina Cooper didn’t delve into some of the planned technology initiatives, she did note that there was an aim to enable real time statement access in the Scotia mobile app by the fourth quarter. Scotia Investments clients can access their monthly statements from the app.

After announcing the move to bring Apple Pay to Jamaica, Tugwell Henry responded, “We’ve successfully completed that pilot and we have the capability to deliver it to the market. However, we’ll have to wait until Apple Pay is officially in Jamaica to make a full roll-out of that programme. That is still on the table and we’re working with them to see the road map and the timeline for Apple Pay to hit the Caribbean, and to certainly hit Jamaica.”

BNSJ is also working on the full roll-out of online international wire transfer capabilities. Real time gross settlement was enabled online last year.

Scotia General Insurance Agency Limited, trading as ScotiaProtect, grew its net profit by 130 per cent for the quarter with policy retentions by clients at 88 per cent. Scotia General is the second largest intermediary for GK General Insurance Limited by premiums written. Scotia Investments Jamaica grew its PBT for Q2 by 54 per cent to $634.93 million.

SGJ’s net interest income for the six months improved eight per cent to $24.25 billion with total operating income rising 13 per cent to $32.15 billion. Despite a 17 per cent rise in operating expenses to $14.13 billion, PBT rose nine per cent to $14.13 billion. Consolidated net profit increased eight per cent to $9.21 billion with an EPS of $2.96. The trailing 12-month EPS was $6.70.

Scotia Group’s total assets grew eight per cent to $763.52 billion over the six months with investment securities at $175.53 billion and cash resources at $195.11 billion. Total liabilities increased seven per cent to $607.61 billion with deposits totalling $511.21 billion. Shareholder’s equity grew 13 per cent to $155.91 billion with a book value of $50.11.

Scotia Group’s stock price declined 1.16 per cent to $55.27 on Friday, leaving the stock up 3.19 per cent in 2025 with a market capitalisation of $171.97 billion. This means SGJ has a price to earnings ratio of 8.25 times and a price to book ratio of 1.10 times. SGJ declared a dividend of $0.45 totalling $1.40 billion to be paid on July 17 to shareholders on record as of June 25. That translates to a dividend payout ratio of 28 per cent, below the 48 per cent figure in April 2019.

The Scotia Group CEO noted that there were different factors which influenced the moves to pay more dividends with Basel III, a change to the regulatory framework for banking capital, at play along with other global risks. BNSJ transferred $8 billion to its retained earnings reserve during the quarter which pushed its capital adequacy ratio from 12.97 per cent to 14.44 per cent.

“That was just one of the considerations. The other one is the fact that we’re in very uncertain times. I think this is probably, when you look at it, one of the periods of greatest level of uncertainty globally. So, that’s one of the other considerations. We try to be very prudent,” Tugwell Henry closed.