Profits down at Scotia

Scotia Group and its subsidiary Scotia Investments reported lower profits for the first quarter ended January this year.

Scotia Group reported net income of $2.54 billion for the first quarter ended January 31, which is $168 million above the previous quarter ended October last year and $104 million below the quarter ended January 31, 2013. Earnings per share (EPS) for the quarter was $0.79 compared to $0.82 for the same period last year.

The Directors maintained the dividend at 40 cents per stock unit payable on April 10.

Total operating income, comprising net interest income after impairment losses and including other revenue, was $8.3 billion, a decrease of $28 million relative to the prior year.

Net interest income after impairment losses for the period was $5.7 billion, down $134 million or 2.30 percent when compared to the same period last year. However, the loan loss expense increased by $234 million to $517 million compared with $284 million with prior year.

As reported by management, “Other revenue for the quarter was $2.56 billion, up $106 million or 4.3 percent when compared with prior year. This was due primarily to increased insurance revenue of $54 million, higher gains on our foreign currency trading and investment book of $36 million and net fee and commission income of $11 million. The increase in the net fee and commission income was due to growth in our mutual funds and unit trust business.”

Operating Expenses were $4.87 billion for the quarter, representing an increase of $237 million or 5.12 percent over prior year. This is due primarily to higher staff related costs of $139 million and operating expenses of $117 million.

Scotia loan portfolio fell in the latest quarter to reached $133.4 billion from $134.8 billion in October last year but is still well ahead of the $122.3 billion at the end of January 2013.

Scotia Investments reported net income for the quarter of $421 million, $66 million or 13 percent below the quarter ended January 31, 2013 and $152 million or 26 percent below the October 31, 2013. Operating Income, comprising net interest revenue and other income of $989 million for the quarter was $119 million or 11 percent below the $1.108 billion for the same period last year; and $230 million or 19 percent below last quarter. Non-interest income, which includes fee income, securities trading gains and net foreign exchange trading income, was $352 million for the quarter, $7 million above the same period last year; and $138 million or 28 percent below last quarter. Net interest income fell to $636 million from 745 million in similar period in 2013 as interest margins contract. Wages grew but other operating expenses fell leaving overall expense in line with that of 2013.

The Board maintained dividend at 45 cents per stock unit, payable on April 10, 2014.