Profit declined 7.3 percent to S5 billion at Scotia Group for the April 2025 quarter, compared to $5.4 billion in the similar period last year, as total operating revenues rose by a billion dollars to $15.6 billion from $14.6 billion in the comparable quarter in 2024.
Profit grew 7.8 percent to $9.2 billion after tax for the six months to April, over the previous year. A drop in loan loss provisions to $651 million in the latest quarter from $1 billion in the 2024 second quarter and $1 billion for the half year, down from $1.25 billion in 2024, helped to boost the group’s profit performance.
Operating expenses grew faster than revenues, climbing 23 percent, with an increase of $1.5 billion to $8.3 billion, wiping out the increase in operating income in the second quarter. Corporation taxes amounted to $2.3 billion in the quarter, compared to $2.4 billion in the prior year.
Total operating revenues for the six months ended April 2025, net of expected credit losses, grew by 9.5 percent, or $2.9 billion, to $33.4 billion from $30.5 billion in 2024. This was primarily driven by the growth in loans, which led to an increase in net interest income of $1.9 billion, or 8.5 percent, and an increase in other revenue of 13 percent.
The Group’s asset base grew by $87 billion or 12.9 percent to $764 billion as at April 2025, with loans increasing 14.7 percent to $324 billion. Since the October close of the 2024 fiscal year, loans only grew in the second quarter, at 15 percent per annum, much slower than the 16.3 percent increase in the 2024 fiscal year.
According to the Group, “loan book continues to perform well with mortgages increasing year over year by 24 percent, consumer loans by 14 percent, credit cards by 8 percent and commercial loans by 7 percent.” Deposits, an important fuel for funding loans and investments, increased 10 percent to $514 billion from $467 billion a year ago.
Scotia Group declared a dividend of 45 cents to be paid on July 17, bringing the half-year payment to 90 cents, up from 80 cents for the similar 2024 period.
Earnings per share for the April quarter amount to $1.61 and $2.96 for the half year. ICInsider.com projects earnings of $8.20 for the year ending October 2025.
The stock is ICInsider.com BUY RATED. At the last traded price of $54.91, the stock trades at an attractive PE of 6.7, well below the market average of more than 13. Most importantly, the critical aspect of the business is lending, and the ability to generate reasonable yearly increases in amounts lent out, thus driving revenue growth.
The present state of the Jamaican economy, including lower debt-to-GDP, which allows for greater fiscal space that will facilitate continued lower interest rates, should result in growth in earnings for years to come. With that, investors can look forward to increased dividend payments and stock price appreciation.