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Scotiabank Jamaica's President and CEO David Noel

Scotia Group’s net income plummets 56.7%

Scotiabank Jamaica's President and CEO David Noel

Scotia Group saw its net income drop 56.78 per cent even as it assisted tens of thousands of customers through loan deferrals amid the coronavirus pandemic.

Scotiabank’s headquarters in downtown Kingston, Jamaica.

Scotia disclosed this week that it has assisted over 50,000 individuals and businesses through its Customer Assistance Programme (CAP) which offered loan deferrals to support those experiencing financial challenges.

The Group continues to offer support through financial solutions including debt consolidation and restructuring.

For the nine months ended July 31, 2020, Scotia Group reported net income of JM$5.56 billion compared to JM$9.79 billion, a decrease of 56.7 per cent, for the corresponding period last year.

“These enhancements increase customer convenience and safety by enabling them to conduct more transactions from anywhere they have internet access.”

– President and CEO of Scotia Group, David Noel

Net income fell $893 million or 7.6 per cent due to lower transaction volumes arising from the global pandemic, BNS said.

David Noel, President and CEO of Scotia Group commenting on the Group’s performance said “The effects of COVID-19 on the world and on our business are unparalleled. Despite the challenges, we continue to deliver commendable results, while continuously innovating to provide solutions for customers. Health and safety remain our top priority as we manage through this crisis.”

Total revenues excluding expected credit losses for the nine months ended July 31, 2020 was $32.1 billion and showed a reduction of $1.7 billion or 5.1 per cent when compared to 2019.

Scotiabank Jamaica’s President and CEO David Noel

Net interest income after expected credit losses for the nine month period was $13.5 billion, down $3.3 billion or 19.8 per cent when compared to the previous year and was primarily attributable to the increase in expected credit losses of $3.3 billion.

Net fee and commission income amounted to $5.1 billion and showed a reduction of $904 million or 15.1 per cent.

The year over year decline noted in fee and commission revenues was primarily attributable to lower transaction volumes stemming from the COVID-19 pandemic.

Insurance revenues declined by $144 million or 5.6 per cent to $2.4 billion owing to the reduction in premium income which was partially offset by higher actuarial reserve releases.

The bank’s overall loan portfolio grew by 12 per cent which Noel said was due largely due to the strong performance of the Commercial Banking unit which grew by 24 per cent versus prior year.

Retail loan growth was 5 per cent year over year which included strong mortgage growth of 16 per cent.

Noel said investment business delivered modest growth despite the prevailing conditions with an increase in assets under management of 4 per cent year over year.

Financial results, however, have been significantly affected by our increased provisions for future credit losses due to the expected economic slowdown.

Noel stated, “The vast majority of these provisions is not a reflection of our existing non-performing loans but is a conservative estimate for potential future losses which may or may not arise.”

Assets increased year over year by $19.3 billion to $557 billion as at July 31, 2020.

Noel said this was predominantly as a result of the growth in  loan portfolio of $23.3 billion or 11.8 per cent and investment portfolio of $16.4 billion or 11.3 per cent which was partially offset by a reduction in cash resources of $11.4 billion or 8.9 per cent, and other assets of $9.0 billion or 13.6 per cent.

The bank has introduced new ATM options to make loan and credit card payments.

Credit card customers without deposit accounts can now use cash to make payments directly to their credit cards.

The bank has also increased transfer limits for online banking have been implemented to facilitate larger payments.

Account information updates can now be made instantly in the bank’s mobile banking app.

Noel said, “These enhancements increase customer convenience and safety by enabling them to conduct more transactions from anywhere they have internet access. Our arrangements with both local telecommunication providers which allow customers to access our banking app at no charge has offered real value to those who previously had challenges affording the data charges.”

The bank is currently finalising plans to roll out an EMV chip and PIN enabled debit cards which offer enhanced security as well as contactless (tap) payment options.