Published: Wednesday May 28, 2008
Scotia Group Jamaica continues to maintain its profit edge over its top rival, reporting net income of $4.7 billion or earnings per share of $1.50 in its half-year results.
National Commercial Bank of Jamaica just weeks before, announced profit of $4.5 billion or $1.83 per share, well well within striking distance of Scotia Group.
But president Bill Clarke, despite urgings from investors to say how Scotia plans to maintain its dominance of the commercial banking sector, refused to be drawn, saying it was not the bank's practice to issue forward-looking statements.
Clarke acknowledged, however, that a big challenge was maintaining growth at current levels during a briefing on the banking group's half-year earnings report.
Total revenues in the half year ending April climbed 33 per cent to $13.8 billion, while the bank also reported "strong" growth, year over year, of more than $9 billion in retail loans, mortgages and its credit-card portfolios.
The banking group's six-month after-tax profits also reflect a more than $1.2 billion improvement on the comparative results of 2007, or profit growth of 18 per cent, due in part to the addition of Scotia DBG Investments to the group in the current period.
The investment company's acquisition was finalised on May 1, 2007.
"With the rebranding of our investment management subsidiary to Scotia DBG during the quarter, Scotia Group is even more strongly positioned with the financial strength and flexibility to deliver the widest range of financial products in the industry," said Clarke, in a company-issued statement.
The group's assets also grew 14 per cent to $282 billion, while its shareholding equity rose to $37 billion, well ahead of NCB, whose comparative numbers were $237 billion of assets and $32 billion of equity.
For the April quarter, the banking group made $2.52 billion in profit, and will pay interim dividends of 32 cents per share - amounting to $995.7 billion - payable on July 3.
NCB's performance in its second-quarter ending March was marginally better at $2.65 billion of net profit. The number two bank declared dividends of 42 per cent per share that was paid this month.
Scotia plans to put renewed focus on business lines, such as its small-business market, and its life-insurance unit, while at the same time keeping a close eye on costs to generate savings.
"We want to take the leadership in small-business financing within the next 12 months," said Patsy Latchman-Atterbury, vice-president for small and medium enterprises.
That plan involves the provision of advisory services centred on financial and business manage-ment.
New initiatives to be undertaken by Scotia Jamaica Life Insurance Company (SJLIC) within the year includes the launch of a retirement scheme, pending approval from the Financial Services Commission, and a critical-illness plan.
For the six-month period ending April, SJLIC, which has appro-ximately 75,000 policyholders, reported gross premium income of $2.5 billion and contributed appro-ximately five per cent to the group's net income.
The Bank of Nova Scotia continues to be the main contributor, 64.62 per cent, to the group's net income.
For the three-month period, BNS recorded net profit of $2.3 billion, a 28 per cent increase compared to the similar quarter last year.