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Scotiabank Jamaica's headquarters in downtown Kingston, Jamaica.

Scotia Group Jamaica profit up 11.5 per cent at mid-year

Scotiabank Jamaica's headquarters in downtown Kingston, Jamaica.

Scotia Group Jamaica reported net income of JM$4.5 billion for the six months ended April 30, 2021, up JM$463 million or 11.5 per cent compared to the corresponding period ended April 2020. 

Total revenues, net of expected credit losses for the six months ended April 30, 2021, totalled JM$21.5 billion, which was marginally lower than the corresponding period by $163 million or 0.8 per cent. 

Management stated that total revenues continue to reel from the impact of the COVID-19 pandemic due the ongoing reduction in interest rates offered in the market and lower transaction volumes, both of which have contributed to a reduction in the group’s net interest income, lower net fees and commissions, as well as insurance revenues. 

The Scotiabank Premium Banking Center on Constant Spring Road in St Andrew, Jamaica
(Photo: Jamaica Business Directory)

Notably, net fee and commission income amounted to JM$3.0 billion, reflecting a reduction of JM$396 million or 11.5  per cent.

In addition to lower transaction volumes stemming from the COVID-19 pandemic, management also attributed the decline in net fees and commissions to the continued execution of the group’s digital adoption strategy, since the use of electronic channels attracts lower fees. 

Insurance revenues decreased by JM$577 million, or 30.3 per cent, to JM$1.3 billion due to the reduction in premium income. 

“The group maintains a very strong capital base, adequate liquidity levels, and remains a financial fortress in the local industry”

— Audrey Tugwell Henry, president and CEO, Scotia Group Jamaica

Operating expenses amounted to JM$13.4 billion for the period and reflected an increase ofJM $361 million or 2.8 per cent. This was primarily attributable to an increase in other operating expenses of JM$795 million. However, there was a reduction in salaries and staff benefit costs of JM$404 million.

‘Strong capital base’

Scotia Group’s asset base increased over the prior period by JM$34.5 billion to JM$573.5 billion as at April 30, 2021, mainly as a result of the growth in cash resources of JM$43.8 billion or 47.7 per cent. However, this was partially offset by the reduction in loan portfolio (JM$8.4 billion or 3.8 per cent) and other assets of JM$801 million or 1.4 per cent.

Cash resources stood at JM$135.8 billion, increasing over the comparative period by JM$43.8 billion or 47.7 per cent. The increase was directly attributable to the growth in core deposits in conjunction with loan repayments. 

Audrey Tugwell Henry, President and CEO of Scotia Group Jamaica noted “We are proud to report an increase in net profit for the six months period of 11.5  per cent notwithstanding the very challenging macroeconomic circumstances.

President and CEO of Scotia Group Jamaica Audrey Tugwell Henry (File photo)

“In our 131 year history, the bank has supported Jamaicans through many arduous periods and has an unmatched legacy of delivering value and providing the right solutions to our customers. 

“The group maintains a very strong capital base, adequate liquidity levels, and remains a financial fortress in the local industry,” she stated. 

Management said the group will make further upgrades to the bank’s current network of 279 automated business machines and will deploy additional intelligent deposit machines over the next few months.