Trinidad’s Republic Bank reported slightly improved results to June, with profits attributable to the group of $325 million in the June quarter up on the $308 million generated in 2014 and an increase to $898 million for the nine months against $869 million in 2014.
Earnings per share for the quarter is $2 cents and year to date $5.56, earnings for the full year should end around $7.60 up from $7.39 in 2014, placing the PE at a $113.99 stock price at just over 15 time earnings.
Net interest income is up 8.7 percent to $618 million for the June quarter and a slower 5.4 percent for the nine months from a year ago to $1.79 million. Total net revenues climbed 26.7 percent to $1.1 billion for the quarter and 3.3 percent for the nine months to June to $2.9 billion. Expenses rose in the June quarter, to $554 million, from $454 million, is down for the year to date, to $1.56 million from $1.58 billion. Loan loss provisions are sharply in the quarter to $122 million and for the nine months, $145 million was booked versus $79 million in 2014. The bank reports that increased provisions were done for the new acquired subsidiary, Ghana HFC Bank to bring the provisioning policy in line with the group’s and impairment loans and goodwill for the Cayman Islands subsidiary.
With strong growth in loans in the June quarter over March, loans which grew to $27.6 billion in March now stands at $29.7 billion and is up 11.65 percent over June 2014 and 9.7 percent over September 2014 and 10.76 percent over April. A big part of the growth is the consolidation of the financial statements of the 57 percent controlled, HFC Bank into the group, adding loans of $1.27 billion in the June quarter. The Ghanian bank was previously treated as an associate with 39.87 percent ownership but Republic who acquired an additional 17.25 percent under a mandatory takeover offer, raising the holdings to 57 percent in May this year.
In July Republic completed the acquisition of the bank in Suriname that was previously owned by RBC Royal Bank with assets of $3.3 billion, a small increase to the groups $62.33 billion in assets at the end of June.
Small profit gain for T&T’s Republic
Loans & profit up at T&T’s Scotiabank
Trinidad’s Scotiabank reported improved results to July, with profits of $157 million in the July quarter, up by 12 percent on the $140 million generated in 2014 and much slower 7 percent increase to $417 million for the nine months against $390 million in 2014.
Earnings per share for the quarter is 89 cents and year to date $2.36, earnings for the full year should end around $3.40 up from $3.18 in 2014, placing the PE just over 18 time earnings based on the stock price of $62.50 it last traded at on the Trinidad & Tobago Stock Exchange. For 2016 earnings should end up around $4 per share all things being equal. All things may not be equal, with reports of negative economic growth in the first quarter of this year and low oil prices, that could result in lower consumption and weaker economic activity.
The July quarterly profit gain is down on the 18.4 percent reported for the April but much more than the $125 million earned in that quarter. For the July quarter revenues jumped sharply by $31 million over April and operating expenses dived by $13 million while loan loss provision was down by nearly $5 million.
Net interest income is up 11 percent to $251 million for the July quarter and a slower 7 percent for the nine months from a year ago to $711 million. Total net revenues climbed 9.3 percent to $378 million for the quarter and 8.2 percent for the nine months to July to $1.08 billion. Expenses fell in the July quarter, to $152 million, from $156 million, is up for the year to date, to $481 million from $466 million. Loan loss provisions are down in the quarter to just $4.5 million and for the nine months $30 million was booked versus $19 million in 2014.
Growth in the loan portfolio is one of the main contributor to increased profit. With only moderate growth in loans in the July quarter over April, loans which grew to $12.8 billion in April now stands at $13 billion and is up 11.3 percent over July 2014 and 11 percent over October 2014. If the bank can maintain this level of growth in loans into 2016 then profits should continue to increase double digit growth levels.
The bank will be paying a 40 cents dividend on October 9 to shareholders on record at September 11, the stock now generates a dividend yield of 2.5 percent.
Knutsford’s sales up 38% cost 44%
Knutsford Express’ audited report for 2015 shows a big 38 percent surge in profit to $69 million over the $50 million in 2014, from revenues of $454 million, 38 percent more than the $329 million generated in 2014. With that level of revenue increase profit should have grown much faster than it did, and should have been closer to doubling.
New routes added could have been a factor as passenger traffic takes time to build up, more importantly, increased cost in a number of areas seems more the culprit. Expenses for 2015 are up 41 percent but excluding $4.58 million of IPO cost included in 2014, the increase would have been 43.5 percent. The overall increase comes against the fact that fuel rose only 12 percent to $70 million and accounted for 19 percent of cost, down from 24 percent in 2014. Excluding fuel, all other costs are up 50 percent over 2014 and 54 percent, excluding the IPO cost, well over the revenue increase of 38 percent.
Staff and labour cost jumped 72 percent to $126 million and now accounts for 34 percent of cost up from 28 percent.
Telephone cost rose 68 percent to $7.9 million. Rent grew 61 percent to $7.8 million, travelling was up 160 percent to $6 million, advertising and promotion grew only 30 percent to $12.4 million and is one of the items that grew more slowly than revenues.
Knutsford’s New Kingston depot
Some items of cost such as repairs and maintenance actually fell while others such as electricity and office supplies rose more moderately than those above.
Profit falls at Massy
The results for the nine months for Massy Holdings showed improved profit after tax for both the nine months and the third quarter ending June, in reality profits from normal operations fell in both periods. Revenues increased by 12.7 percent to $9 billion for the first three quarters of the 2015 financial year from $8 billion, due mainly to the acquisition of a subsidiary in Columbia in the last quarter of 2014 that contributed $650 million to revenue and $10 million to pretax profit.
Profit before tax increased by 5 percent from $558 million to $586 million. For the June 2015 quarter profits fell before rebranding cost to $175 million versus $208 million in 2014. In 2014, Massy group incurred $59 million in rebranding before tax and would have suffered a decline in both the quarter and nine months results, excluding this one off cost. Additionally, there was increased interest expense of $29 million above that of 2014 from raising $1.2 billion in 2014 to refinance short-term debt and to fund new projects. Earnings per share for the nine months come out at $3.95 and $1.19 for the June quarter.
Operating profit before finance costs declined to $180 million from $208 million, for June 2014 quarter and for the six months $625 million versus $616 million.
During the nine months, the Insurance division contributed 23 percent more to revenues to reach $249 million percent, and delivered $36 million to profits up from $26 million in 2014. Automotive & Industrial Equipment had revenues of $1.78 billion and profit of $171 million, for 2014 revenues amounted to $1.58 billion with profit of $154 million. Retailing had revenues of $5 billion compared with $4.6 billion and profit of $268 million in 2015 versus $273 million in 2014. Energy & Industrial Gases saw slightly lower profit of $154 million versus $168 million in 2014 from revenues $1.15 billion in 2015 and $772 million in 2014. Information technology revenues of $410 million slightly higher than the $414 million in 2014 and profit of $45 million from $53 million and Other Investments experienced revenues of $349 million, down on the $374 million in 2014 and profit of $60 million from $71 million.
Massy had lower revenue in the critical and home market with reports indicating a contraction in the economy and continued tightness in the Eastern Caribbean markets. With oil prices set to remain at low levels for a while the company could be challenged to grow profits in the near term.
Scotia Group jumps 11% on JSE Friday
Scotia’s stock closed with a gain of $2.70 on Friday.
Scotia Investments crossed 623,135 units of its parent company shares out of a total of 700,154 they bought, between $26 and $26.99 with 612,725 units traded at $26.99, for in house purposes.
The Jamaica Stock Exchange closed trading with a total of 30 securities changing hands. A total of 2,251,172 units traded, valued at $24,730,236, with 9 stocks rising, 12 declining in all market segments. The JSE Market Index rose 2,637.77 points to 100,293.46. The JSE All Jamaican Composite index jumped 2,948.29 points to 111,040.12 and the JSE combined index rallied 2,460.94 points to end at 103,322.22.
IC bid-offer Indicator| At the end of trading, in the main and junior markets, the Investor’s Choice bid-offer indicator had a reading of 10 stocks with bids higher than their last selling prices and 5 with offers that were lower, including 2 from the preference share sector.In trading, Cable and Wireless traded only 559,840 shares, down from 4,748,662 units on Thursday and closed at 52 cents. At the close, visible bids exist for 10,000 shares at 50 cents and ranging between 48 cents and 49 cents, a total of 1,702,558 units and between 45-47 cents 537,500 shares. Visible offers at 52 cents, amount to 1,040,394 units, at 53 cents, 942,650 million shares, next are 595,177 shares at 55 cents and at 56 cents, 3,078,000 units. Carreras closed at $51 for a gain of $1 while a mere 1,045 units traded. Desnoes & Geddes traded 17,500 shares at $6.80, up 80 cents, Gleaner Company traded at 268,116 shares and added 5 cents to $1.85, Grace Kennedy traded down $1 at $63 with only 1,370 shares, Jamaica Broilers closed unchanged at $5.60 with 13,413 shares changing hands. National Commercial Bank traded just 53,230 shares and closed with a fall of 56 cents at $27.50, after it traded earlier at $30. Sagicor Group with 13,000 shares changing hands, closed with a gain of 43 cents at $13, Scotia Group traded 711,422 units between $23.80 and $26.99 but closed with a gain of $2.70 at $26.50.
At the close there were only 6 offers ranging between $26.50 and $30 to sell 73,748 shares at $26.50, 299,990 at $27 23,750 units at $27.10 and 54,600 shares at $30. On the buying side, bids start at $25.01 to buy 800 shares but they are thin, until they drop to $23.71, to buy 306,040 shares. Scotia Investments lost 50 cents and ended at $26.50 while 9,485 units traded, the stock opened down to $24.10 within six minutes of the market opening, in response to disappointing earnings for the July quarter. Proven Investments ordinary share, traded 32,600 units at 21 US cents, Supreme Ventures added 14 cents to end at $4.14 with 2,000 units changing hands.
3 stocks gained 1 fell on TTSE
Trinidad’s Scotiabank posted a 12% Q3 profit increase
At the close, the Composite Index gained 0.63 points to 1,145.19, the All T&T Index gained 0.15 points at 1,947.64 and the Cross Listed Index fell 0.15 points to 44.96.
Gains| Clico Investment Fund closed with 46,705 shares changing hands 3 cents higher at $22.54 a total value of valued at $1,052,276, National Commercial Bank traded just 2,000 shares to close 3 cents higher at $1.63 and Scotiabank closed with 4,000 shares valued at $250,000 changing hands to gain 1 cent and end at $62.50. The bank reported improved results to July with profits of $157 million in the July quarter up by 12 percent on the $140 million generated in 2014 and $417 million for the nine months against $390 million in 2014.
Losses| Sagicor Financial Corporation closed with 3,100 shares changing hands at $5.95 after losing 5 cents.
Firm Trades| Angostura Holdings ended with 25,000 shares valued at $350,000 changing hands at $14, First Citizens Bank had only 3,338 shares changing hands to end at $35,
Grace Kennedy closed with just 655 shares changing hands at $3.50. Guardian Holdings added 3,445 shares to close at $12.90, Prestige Holdings with 7,209 units changing hands ended unchanged at $9.89 and West Indian Tobacco traded just 158 shares to close at $125.42.IC bid-offer Indicator| At the end of trading the Investor’s Choice bid-offer indicator had 4 stocks with the bid higher than their last selling prices and 5 stocks with offers that were lower.
Quiet day for juniors
Trading on Friday ended with just 496,232 units, valued at $1,411,394 changing hands from a total of 11 securities that traded. The price of 5 stocks declined and 3 advanced with the junior market index losing 2.90 points to close at 966.98.
At the close, 5 securities ended with no bids to buy, while 4 had no stocks being offered for sale and 5 stocks closed with bids higher than the last traded prices and none closed with lower offers.
Stocks trading are, Access Financial traded 4,840 shares to close with a 18 cents fall to $12.02, Blue Power eased 40 cents to close at $13.60 with 25,000 units trading, Derrimon Trading ended with 15,000 shares changing hands and closed at $2.65, for a gain of 5 cents, Dolphin Cove closed with 1,131 shares changing hands at $12.52, for a 38 cents decline, Honey Bun traded 
5,000 units at $3.98, after adding 3 cents. Jamaican Teas had 2,774 shares changing hands, 25 cents higher at $3.50, KLE Group traded unchanged at 50 cents with 5,000 units changing hands, Knutsford Express with 100 shares changing hands ended at $6, Lasco Distributors fell 11 cents to $1.80, after it traded as high as $1.92 and ended with 76,000 units changing hands. Lasco Financial ended with 146,387 shares changing hands at $1.87 and Derrimon Trading 11.75% preference share, ended with 215,000 units changing hands with the price slipping 1 cent to $2.39.
J$ steady against US on Friday
The selling rate for the Jamaican dollar was fairly stable against the US dollar on Friday as there was nearly US$8 million more bought than sold. Purchases by dealers of foreign currencies on Friday, resulted in the Jamaican currency selling rate slipping against the Canadian dollar and rising against the British Pound. The market closed with dealers buying the equivalent of US$43,580,467 in contrast to US$26,547,793 on Thursday, while they sold the equivalent of US$34,164,793, previously US$29,211,572.
In US dollar trading , dealers bought US$40,116,402 compared to US$23,903,351 on Thursday. The buying rate for the US dollar rose 23 cents to $117.68 and US$32,636,062 was sold versus US$27,572,536 on Thursday, the selling rate gained 1 cent to close at $118.16. 
The Canadian dollar buying rate fell $1.14 to $86.34, with dealers buying C$760,150 and selling C$908,138, at an average rate that rose 50 cents to $89.39. The rate for buying the British Pound rose 93 cents to $177.88 for the purchase of £1,861,676, while £453,758 was sold, at an average rate that fell 92 cents to end at $179.38. At the end of trading, it took J$131.11 to purchase the Euro, down $1.43 on Thursday’s rate, according to data from Bank of Jamaica, while dealers purchased the European common currency at J$128.38, a decline of $1.45 on Thursday’s rate. Other currencies bought, amounted to the equivalent of US$92,322, while the equivalent of US$152,862 was sold.
Highs & Lows| The highest buying rate for the US dollar, rose 5 cents to $118.75, the lowest buying rate gained 16 cents to $96.69 and the highest selling rate remained at $123.69.
The lowest selling rate fell 70 cents to $114. The highest buying rate for the Canadian dollar lost 40 cents to $89.40, the lowest buying closed unchanged at $70.47 and highest selling rate put on 37 cents to $91.47. The lowest selling rate added 90 cents to end at $84.90. The highest buying rate for the British Pound, fell 10 cents to $180.60, the lowest buying rate eased 21 cents to $144.54, the highest selling rate jumped $3.41 to $187.45 and the lowest selling rate lost $1 to $174.
JSE’s sizeable gains on Friday
Scotia Investments fell to $24.10 down $2.90 within 6 minutes of the market opening, with 6,485 units trading in response to the nine months results of the company 
released after trading closed on Thursday, National Commercial Bank traded at $29.50 which helped in pushing the main market indices upwards and Cable & Wireless traded 513,840 shares at 52 cents.
The market has so far have trading in 17 securities with a volume of 720,412 units, with 7 stocks declining and 2 rising.
Trading activity resulted the JSE Market Index rising 478.29 points to 98,133.98. The JSE All Jamaican Composite index gained 534.59 points to 108,626.42 and the JSE combined index added 447.42 points to be at 101,308.70. The junior market fell 0.39 points to 969.49.
Scotia Group steadies ship
Jackie Sharp – CEO Scotia Group
Profit for the July 2015 quarter, was $2.31 billion, a shade off from the results for the April 2015 quarter of $2.36 billion, but well down on the July 2014 quarter of $2.9 billion. The decline in the quarter is due mainly to a fall-off in net gains on investment assets of $240 million, net interest income of $140 million, foreign exchange trading gains of $220 million and insurance revenues of $230 million.
Earnings per share for the nine months amounts to $1.93 and for the last quarter 72 cents and should end the year around $2.75.
The Group reported lower insurance revenue, lower net gains on foreign currency activities and financial assets in the Investment Management segment of the Group with total revenue for the nine months of $26.3 billion, a decrease of $319 million from the prior year. For the July 2015 quarter, total revenue of $8.62 billion was down $103 million from the April quarter. Net interest income after impairment losses for the period was $16.9 billion, an increase of $76 million versus the same period in 2014.
Expenses have been held quite tightly, resulting in an increase of $533 million or 3.7 percent when the Asset Tax is excluded for the nine months, while expenses were just $100 million more in a the third quarter, over the similar period in 2014.Total assets increased year over year by $23.4 billion or 5.8 percent to $424 billion as at July 2015. The growth was primarily attributable to increases of $4 billion or 2.9 percent in Loans, net of allowance for impairment losses to $148.7 billion, $8 billion or 5.4 percent in investment and pledged assets and $8.8 billion in other assets resulting from higher retirement benefit asset. Loans as a percentage of total assets have declined from 36 percent to 35 percent as of July this year. The ratio needs to be moving in the other direction if profit is to commence growing at an attractive pace. At a quarterly rise around $1 billion the growth in loans is not strong to delivery good bottom line growth and help the stock to be above the average of the market.
An interim dividend of 40 cents per stock unit payable on October 15, 2015, to stockholders on record at September 23, 2015 was approved.
