The debt swap that Sagicor Investments participated in — the GOJ’s National Debt Exchange (NDX) — was costly for the group, not only did they get a big hit resulting in a one-time trading loss of $423 million, they also suffered reduced interest income amounting to $71 million in the quarter to March and a reduction of gross interest income going forward of approximately $57 million per month.
For the three-month period, net Interest Income was $717 million compared to $752 million in the prior year. Income earning assets was $76.9 billion compared to $77.5 billion in the prior period. Net interest margin contracted to 3.73% versus 3.88% in 2012, largely due to NDX.
Non-interest income before NDX losses, was $249 million compared to $337 million in the prior period. This decline was due largely to reduced trading opportunities in quarter. The par value of JA$ securities exchanged was $31.9 Billion. The par value of US$ securities exchanged was US$77.4 million.
Asset management, credit and service fees, trust services and FX trading and translation gains recorded improved results compared with 2012. Fixed income trading, equity trading and stock brokerage posted lower revenues. Non-interest expense increased by 8% to $494 million compared to $457 million for the prior year. Depreciation and amortisation charges associated with branch relocations and technology improvements, rose by $10 million. The current period was also impacted by asset tax charge of $30 million while there was none in Q1, 2012.
Loan Quality | Non-performing loans and leases amounted $712 million representing 7.7% of the portfolio (BOJ December 2012 industry average is 6.8%) versus $548 Million or 5.7% of the portfolio at December 2012. Subsequent to the end of the quarter there was a reduction of $100 million in the Non-performing loans as revealed by the company in their quarterly financial report.
Balance Sheet & Capital | Total Assets were $88.6 billion, up $0.3 billion since December 2012. Securities portfolios increased by 2% to $72.0 billion while our credit portfolio declined to $8.9 billion, from $9.3 billion at December 2012. Interest bearing liabilities now stand at $75.2 billion, up $0.8 billion compared to $74.4 billion at December 2012.
Stock Outlook | We estimate that the company will earn around $2.50 per share for the year ending December and with a price of $15.57 there is still value in holding the stock for medium to long term growth as well as excellent dividend payment.
[…] $6 per shares, with the price ending at a new 52 weeks’ high after gaining 45 cents for the day. Sagicor Investments bought the block as brokers for the buyer. Carreras was the other major traded to take place in the […]