Scotia Group’s Q1 profit jumps but

Scotia Group released their first quarter results to January with net profit rising 54 percent to $3.4 billion from an increase in revenues of net of interest cost of 13 percent to $10.85 billion.
A reduction in loan losses from $427 million write off in 2017 to a small surplus of $6 million in 2018 and a 94 percent jump in Insurance premium to $1.17 billion help to boost the growth considerably.
Without the big change in loan provision profit from ongoing operations would have been flat compared to the similar quarter in 2017. The group also gains $753 million from the sale of CrediScotia. The group continued to struggle to grow the profit from continuing operations and the lack of growth in loan remains the number one issue. Without robust increase in this critically important area that accounts for the bulk of income, the group’s profitability is going to be stressed. The loan portfolio declined to $167.6 billion, from $168.2 billion in 2017.
The stock rose based on the results and now trades around the $54 region on the Jamaica Stock Exchange at a PE of 11 based on 2018 projected earnings. A dividend of 48 cents per share was declared and the stock should deliver a yield around 4 percent which is higher than Treasury bill rates.

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