Faced with cross currents of one sort or the other Scotia Group has had to navigate some traitorous water over the past two years or so. They may be coming to the end but their latest results are not very encouraging. For with profit of $10.5 billion in 2013 up from $10.2 billion in 2012, Scotia could just manage $9.76 billion last year or $3.14 per share. The group so far seems to be retreating rather than going forward, with the latest results.
Scotia in its latest quarterly report reported net profit of $3.845 billion for the six months ended April 2015, a fall of $1.1 billion, from the restated net income of $4.96 billion for the period ended April 2014. For the quarter to April net profit came in at $2.3 billion versus $2.69 billion in the April 2014 quarter, reduction in foreign exchange trading and securities trading gains and increased in other operating costs were major contributors to the decline but were partially offset by increased fee income and insurance revenues.

For the half year the full expensing of Asset Tax in the first quarter as well as the increase in the asset tax rates from 0.14 percent to 0.25 percent imposed in May 2014 impacted the results. Additionally, during the second quarter a new tax regime for insurance companies became effective in March 2015, as a result insurance companies were subjected to corporate income tax of 25 percent on statutory income. This change resulted in an increased tax charge of $368 million for Scotia Life. Total revenue for the six months was $17.7 billion, an increase of $372 million.
Net interest income after impairment losses for the period was $11.4 billion, an increase of $235 million when compared with the same period in 2014. There was a reduction in the impairment losses on loans of $242 million.
Operating Expenses for the six months amounted to $9.94 billion and increase of $434 million over the $9.4 billion in 2014 excluding the Asset Tax of $1.29 billion being recorded in the financial results for April 2015, compared to $484 million for April 2014.
The loan portfolio is up $10.8 billion or 7.9 percent over April last year, and after allowance for impairment losses, loans amounted to $147.55 billion as at April. Non-performing loans totalled $4.9 billion, representing 3.26 percent of total gross loans down from 3.45 percent last year and 3.34 percent as at January this year the bank advised investors. The Group’s aggregate loan loss provision as at April 2015 was $5.3 billion.
Earnings per share amounts to 74 cents for the quarter and $1.21 for the half-year and looks like ending the year just below $3 per share. The stock traded on the Jamaica Stock exchange at $25.50 on Thursday. A dividend of 40 cents was declared, payable on 15th of July.