Susan Gordon, Business Reporter

William 'Bill' Clarke (right), president of Scotiabank Jamaica, presents a plaque to Shirley Tyndall and Financial Secretary Collin Bullock for service to financial administration. Scotiabank on Thursday hosted a reception for senior government officials in appreciation for the business that the bank does with government, held at The Ruins, Mona Visitors Lodge, University of the West Indies, St. Andrew. Clarke used the occasion to announce a new mortgage loan facility for public sector workers at a low rate of 11 per cent. - Winston Sill/Freelance Photographer

The Scotia Jamaica Building Society (SJBS), a subsidiary of the $200 billion Bank of Nova Scotia Jamaica Limited (BNS) is to offer public sector employees low interest mortgages in 2007 priced well below current rates in the marketplace.

Scotiabank president and chief executive officer William 'Bill' Clarke said the building society would set aside a maximum of $500 million from which it would offer university graduates who are employed to the public sector for three years and over, mortgages at 11 per cent interest rate.

The rate is fixed for five years, but thereafter a variable rate will apply. The maximum mortgage period is 30 years.

The offer undercuts a 12.99 per cent loan sale that private mortgage leader Jamaica National Building Society launched in the holiday season, but is still two points behind state housing giant, the National Housing Trust whose top rate is 8.0 per cent.

Public sector employees who meet Clarke's qualifying criteria will be able to borrow up to $10 million from the pool.

The Scotiabank boss made the announcement Thursday at a cocktail function at Mona Visitors Lodge, University of the West Indies, organised by the bank to mark its 100th year of doing business with the Government, its singly largest client.

"In celebration of this great occasion, we would like to offer public sector workers - and by public sector we mean persons who are graduates who work with the public sector for a minimum of three years - a special mortgage facility at Scotia Jamaica Building Society...," said Clarke.

"Mr. Bullock, no guarantee is required," added Mr. Clarke, directly addressing Financial Secretary Collin Bullock.

With a quip on Yuletide season, Clarke said he was not playing the role of Santa Claus, but wanted to help to provide affordable housing for public sector workers, adding it was the bank's contribution towards helping to attract and retain young professionals in Jamaica.

He said the offer which was similar to another Scotia initiative five years ago, would run until the $500 million was fully utilised.

First time home buyers

"We are focusing on those employees who would become first time home buyers," Clarke later told Sunday Business, adding that he did not want to make any projection of growth for the building society as a result of the service to be offered. But said Gladstone Whitelocke, general manager of SJBS: "Client influx is hoped to have spin-offs in other product areas of the bank."

Although no income limit was announced for the mortgage loan, Whitelocke said lending would be based on affordability.

Both Shirley Tyndall, the former financial secretary, and Bullock, her successor, were given silver plaques by Scotiabank for service to financial administration. Bullock was a deputy governor at the central bank prior to taking up his new job last year.

The business that Scotiabank Jamaica generates from government, contributes approximately 12 per cent to the bank's overall profits, according to Clarke. Scotiabank's net profits stood at $6.8 billion for financial year ending October 2006, some $816 million of which it would have earned from its transactions with the state and its agencies.

susan.gordon@gleanerjm.com