Scotia Group head quarters
A $2.5 billion jump in net interest income and a billion dollar increase in fees and foreign exchange gains pushed profit before tax at Scotiabank Jamaica to $6.1 billion from $3.4 billion for the April 2022 quarter and $4.2 billion after tax for April 2023 second quarter from $2.4 billion for the same period in 2022 that resulted in earnings per share of $1.35 up from 77 cents in the April 22 quarter and $2.45 for the half year with an indication that full year earnings will be in the order of $5.30 per share.
Net interest income came in at $9.4 billion for the current year’s quarter, up from $6.9 billion in 2022, while expected credit losses were flat at just over $665 million in the current quarter.
Net fees, foreign exchange trading, and other income were $3.9 billion for the 2023 quarter, up 30 percent from $3 billion in the previous year. For the year to date, net interest income came in at $18.5 billion versus $13.3 billion in the year before. Expected credit losses were flat at roughly $1.2 billion, while other income came in at $8.3 billion versus $7 billion in 2022. Expenses were well contained but increased by 14 percent to $6.6 billion in the April quarter from $5.8 billion in 2022, with the year to date rising just under 11 percent to $14.4 billion versus $13 billion in the prior year.
The group’s segments are having a mixed year, with half year numbers showing Treasury generating external revenues of $5.8 billion and profit of just over $1 billion compared with revenues of just over $3 billion in the previous year’s half year but profit before tax was flat at just over $1 billion in each. Retail banking saw a big jump in segment profits of $1.9 billion compared to $500 million in the 2022 half year, from revenues of $9.9 billion compared to $9 billion in 2022.
Audrey Tugwell Henry Scotia group’s CEO
Corporate and commercial activities generated $7.3 billion in revenues and profit of $5.6 billion compared with revenues of $5.1 billion in 2022 with profit before tax of $2.8 billion, while Investment banking had revenues of $1.6 billion and a profit before tax of $800 million compared to revenues of $1.5 billion in the 2022 half year and profit $650 million. Insurance services generated income of $2.5 billion in 2023 with profit before tax of $2.15 billion compared to revenues of $1.17 billion in 2022 and profits of $789 million.
Significantly, loans grew a solid 20 percent from $207 billion at the end of the April 22 quarter to $249 billion at the end of April this year, while customers’ deposits grew 10 percent from $400 billion to $440 billion.
Despite growth in earnings, Shareholders’ equity contracted from $113 billion as of April 2022 to $109 billion. A dividend of 35 cents per share was declared for payment in July.
The stock trades at $33.60 on the Main Market of the Jamaica Stock Exchange on Friday at a PE of just 7.
Going forward, Scotia is in a great position to benefit from the resurgence in the Jamaican economy with expectations of continuing growth to take place going forward as the government continues to reduce the debt to GDP ratio thus freeing significant resources to facilitate long term spending on infrastructure development within the country provide a significant leg for continued growth in the Jamaican economy.
