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Scotiabank - San Fernando branch (Photo: trinigo.com)

Scotiabank TT reports dip in income after tax

Scotiabank - San Fernando branch (Photo: trinigo.com)

Scotiabank Trinidad and Tobago Limited has reported that its net income after tax has fallen by 22 per cent or TT$147 million when compare to the previous year, reaching TT$520.8 million as at October 31, 2020.

For the year under review, the financial institution recorded total revenue of TT$1.78 billion, which was TT$82 million short of its achievement in 2019.

In a statement attached to the results, Chairman Derek Hudson and Managing Director Stephen Bagnarol attributed the reduction in revenue to “over seven months of reduced economic activity”.

Scotiabank Trinidad and Tobago Managing Director Stephen Bagnarol speaks about the services of the Division Company at its location, Ramsaran Park, Chaguanas.
(Photo: Trinidad and Tobago Newsday)

Pandemic woes

“Additionally, our expected credit losses have increased by over [TT]$86 million over the prior year as we prudently position the group for potential future expected credit losses that could arise due to the impact of COVID-19 on the Trinidad and Tobago economy,” the directors wrote.

As a result of the pandemic, consumer demand has dipped, economic activity has slowed and there was “lower investment on the part of several business segments”. In response to these challenges, the directors pointed out that the financial service provider focused on reducing its non-interest expense.

Derek Hudson, chairman, Scotiabank Trinidad and Tobago Limited (Photo: Trinidad Express)

For the year just ended, the bank lowered its non-interest expense from TT$767.13 million in 2019 to TT$757.34. Likewise, for the final quarter Scotiabank reduced non-interest expense to TT$175, which was TT$204.08 million at the end of the same period in 2019.

A strong balance sheet

In the meantime, the financial group increased its asset base by TT$2.1 billion to TT$28 billion as of the year’s end.

During the year, the bank increased its loan portfolio by approximately TT$200 million while customer deposits grew by “TT$1.8 billion or 10 per cent year over year signalling continued confidence in the strength of
the group,” the directors noted.

“Our insurance segment also saw increased policy sales resulting in a $100 million increase in policyholder liabilities over the prior year. Despite the significant increase in expected credit losses and lower profitability, the group’s capital adequacy remains very strong and stands at approximately 20 per cent at the end of October,” they added.

Scotiabank in Port of Spain, Trinidad and Tobago (Photo: My Vue News)

Given Scotiabank Trinidad and Tobago’s position, the directors also pointed out that the group will be able to continue investing and withstand shocks that may arise in these uncertain economic times.

Digital transformation

For the period under review, the directors said the group “made good progress on many important strategic initiatives aimed at advancing our digital footprint and supporting and deepening relationships with our
customer”.

“Our digital agenda has been accelerated due to the current health crisis. We have continuously provided upgrades and enhancements across all our digital channels to allow customers more options to bank remotely and minimise their potential exposure to the virus,” the statement continued.