Scotia Group head quarters in Kingston.

The economies of Trinidad and Tobago and that of Jamaica have been performing in opposite directions in recent years. While Trinidad continues to be in deep recession, Jamaica has been recording mostly moderate growth.
In such environments, it would be expected that businesses would be doing better in the one that is growing and poorly in the other.
The performance of Bank of Nova Scotia’s subsidiaries in each of the countries, shows differing fortunes, with the Scotiabank Trinidad enjoying an increase in loans in its latest results to October and the Scotia Group in Jamaica remaining flat, year over year at $166.5 billion. Banks make the bulk of their profits from lending money. Lending not only generates interest on the amounts lent but fees associated with loans such as commitment fees and in a number of cases annual review fees.
For Scotia Group Jamaica, profit after tax rose just 7.7 percent for the year to October, resulting in $12.17 billion attributable to the Group’s shareholders. For the October quarter profit, rose to $3.36 billion from $3.1 billion in 2016.
Net interest income grew by $1.27 billion to $26.64 billion for 2017 versus $25.38 billion in 2016, but a sharp climb in bad loan provisioning of $746 million, reduced the impact of the rise in net interest income. Other income grew by $1.6 billion for the year to $15 billion.
Trinidad’s Scotiabank’s profit before Taxation increased by 11 percent and 5 percent after an increase in corporation tax rate in that country. Profit for the October quarter, dipped to $151 million due to increased taxation, from $158 million in 2016. Earnings per share ended the year at $3.73 for a PE ratio of 16.35.
Total Revenue, comprising Net Interest Income and Other Income amounted to $1.7 billion for the period ended October 2017, an increase of $117 million or 7 percent over the comparable period in 2016. Net Interest Income for the period ended October 2017 was $1.2 billion, $115 million or 10 percent higher than for 2016, driven mainly by growth in the retail loans and investment securities portfolios. Other Income for the same period was $481 million, $2 million higher than the prior year mainly driven by revenues earned from the credit cards portfolio.
Loan Loss Expense for the period ending October 2017 was $106 million, an increase of $29 million over the prior year for the Trinidadian bank. Loans advanced to Customers, closed the period at $13.9 billion, an increase of $681 million or 5 percent compared to 2016. Retail loans grew by $645 million or 6 percent over 2016.
Total Non-Interest Expenses 2017 was $686 million, down from $691 million in 2016 for Trinidad.
The big question, what resulted in the Trinidadian company enjoying growth in loans in a declining economy while Scotia Group operating in an economy that is growing could only hold the loan portfolio steady, for the most profitable area of operation?