ClarkeSCOTIABANK JAMAICA has reported a third quarter net profit of more than $1.5 billion, an increase of $561 million over the same period last year, and in the process recorded its best quarter on record.
William Clarke, managing director of Scotiabank Jamaica, said the results were achieved despite the renewed challenges in the economy and were attributable to the proactive management of credit, interest rate and liquidity risks, as well as exceptional expense control.
In a release yesterday, the Bank said net profit for the nine months ended July 31 was just over $3.6 billion, a 25.5 per cent increase or $743 million more than the $2.9 billion recorded during the corresponding period last year.
EARNINGS PER SHARE
Earnings per share increased by 51 cents to $2.50 from $1.99, while return on equity was 33.6 per cent, compared with 32.8 per cent last year. Productivity ratio increased to 49.68 per cent from 49.04 per cent, while quarterly dividend increased 5.5 cents to 36 cents per share.
Scotiabank said it has embraced the implementation of International Financial Reporting Standards (IFRS), formerly International Accounting Standards (IAS), and has adopted IFRS as at November 1, 2002.
The release said Scotiabank's board has approved an interim dividend of 36 cents per stock unit, to be paid on October 8 to stockholders on record at September 19. The Bank said "this represents a record for quarterly dividends."
Total revenue, comprising net interest income and other revenue, grew by 29.2 per cent over last year to just over $10 billion. Net interest income was $8.2 billion, up almost $1.8 billion or 27.58 per cent from last year. The increase was primarily due to growth in average total earning assets and improved yields during the quarter.
Other revenue, excluding Insurance Premium Income, was $1.6 billion, up $426 million when compared with last year. Insurance Premium is attributable to ScotiaMINT, the interest sensitive life insurance policy marketed by Scotia Jamaica Life Insurance Company. Net premium income increased by $61 million, an increase of 61.6 per cent. Scotiabank said ScotiaMINT continued to enjoy the largest share of the local interest sensitive insurance market, experiencing a record high of $2.5 billion in gross premium income for the nine month period.
The Bank also said it has continued to strengthen its capital through solid growth in earnings. Total stockholders' equity grew to $15.9 billion, $1.3 billion or 9.2 per cent higher than the previous quarter, and $2.9 billion or 22 per cent higher than the same period last year.
According to the release, Scotiabank's productivity ratio continued to lead the banking industry, "as we exercise exceptional expense management. The productivity ratio (non-interest expense as a percentage of total revenue) a key measure of cost effectiveness was 49.68 per cent."
SIGNIFICANT DISSIMILARITIES
It added that "if insurance premium and related actuarial expenses were excluded to recognise the significant dissimilarities between the revenue/ expense pattern of the insurance business and the other financial services offered by the Scotiabank group, the productivity ratio for the period was 40.75 per cent, which is significantly better than the international benchmark of 60 per cent." The Bank explains that the lower the productivity ratio, the better.
The Bank also reported that non-interest expenses excluding change in policyholders' reserve and loan loss provisions
