Scotia Group Jamaica getting stronger with good third-quarter results
Net income up 31% to $7.28 billion for nine months ended July 31, 2021Sunday, September 12, 2021
Scotia Group Jamaica has reported strong growth over the last nine months and has cut its non-performing loan portfolio.
The banking group is reporting net income of $7.28 billion, representing an increase of 31 per cent for the nine months ended July 31, 2021, compared to $5.56 billion as at the corresponding period last year. The improved performance was underpinned by strong collaboration across all business lines, which has enabled the group to continue to execute well on its customer first strategy.
Net interest income after expected credit losses for the nine-month period was $15.0 billion, up $1.6 billion or 11.6 per cent when compared to the corresponding period last year and was primarily attributable to the reduction in expected credit losses of $3.3 billion. The prior period results included higher credit loss provisioning given the revised assumptions incorporated in the impairment methodology, in conjunction with the adoption of a more prudent approach in determining credit loss provisions.
Arising from the good performance over the months and the third quarter, the board of directors has approved an interim dividend of 35 cents per stock unit in respect of the third quarter, which is payable on October 20, 2021 to stockholders on record as at September 28, 2021. Commenting on the group's performance, Scotia Group President and CEO Audrey Tugwell Henry expressed pleasure in delivering another quarter of strong results for shareholders.
She was quick to mentioned that the group's, “clearly defined strategy of investing in our people, processes, products and technology continue to drive the business forward despite the very real obstacles present in the current business landscape. Notwithstanding the challenges, the group continues to perform well as we focus on the needs of our customers.”
Speaking at the bank's quarterly news briefing yesterday, Tugwell Henry cited deposits, which continue to grow, with an increase of 11 per cent versus prior year as customers consistently choose Scotiabank as their financial partner. Scotia's mortgage book also showed solid performance, recording growth of 11 per cent year over year.
Its Scotia Insurance subsidiary had a commendable quarter with the number of policies sold increasing by two per cent when compared to the corresponding period last year. “This is an area that we will continue to prioritise, as we ensure that our customers have adequate protection for all eventualities. Scotia Investments delivered a solid contribution to the group's results and we expect further improvements as the economy recovers,'' Tugwell Henry explained.
During the quarter, the group continued to advance its customer first strategy, which ultimately seeks to help customers achieve their financial goals. A critical component of this strategy is the optimisation of the business through continued investment in digital technology to make everyday banking easier.
In July, the banking group made further enhancements to its mobile banking app including the ability to transfer funds to pay personal or third-party loans, easier payment of credit cards and upgrades to its data encryption to further improve security. The bank's efforts in the digital banking space were recently recognied as the Most Innovative in Data by The Banker's Global Innovation in Digital Banking Awards 2021.
The Scotiabank president and CEO had good news about its . Small and medium-sized enterprise (SME) customers noting that “our SME customers remain a key segment for us and we are committed to offering the best financial advice and solutions to support them to be successful. In June, the bank boldly introduced a special, market leading rate of 6.5 per cent for secured loans to the industry.”
She explained that the response from the market has been very positive and is demonstrative of the recovery taking place. According to Tugwell Henry, “while the overall growth outlook for 2021 has been dampened by the recent resurgence in COVID-19 cases commencing the country's third wave and resulting in a retightening of containment measures, we remain optimistic. We know that as a country and a people we are very resilient.”
She pointed out that as Scotia Group look towards the final quarter of the year, it will continue to execute on its digital transformation initiatives, upgrade and expand its ABM network, provide relevant financial solutions to meet customers' needs and focus on enhancing customer experience right across the Scotia Group.
The Scotiabank Group boss said the organisation will be, “aggressive and assertive in Q4 to continue the growth.” For her part, Michelle Wright, chief financial officer, highlighted the good news that the non-performing loan portfolio is going down, so much so that urrently it is below the industry average, which is 2.7 per cent of total loans.