Date: September 14, 2018
For the nine months ended July 30, 2018, Scotia Group Jamaica Limited’s (SGJ) Net Interest Income declined by 4% to $19.12 billion, moving from $19.93 billion for the corresponding period in 2017, while Interest Expenses declined by 27% to total $2.42 billion (2017:$3.33 billion). Interest Income for the period decreased from $23.26 billion in 2017 to $21.54 billion. The Company noted, “While there were increased loan and transaction volumes across our business lines, this was offset by reduced net interest margins as a result of lower interest rates, due to a stable macroeconomic environment and increased competition.” Net Interest Income for the third quarter fell 7% to $6.30 billion relative to $6.76 billion for the correspond quarter of 2017.
The company reported an Impairment Loss on Loans of $1.17 billion compared to the loss of $1.48 billion for the comparable period in 2017. As such, Net Interest Income after Impairment losses on loans fell 3% to $17.94 billion relative to the $18.44 billion recorded for the corresponding period in 2017.
Total Other Revenue increased by 26% to $13.92 billion (2017: $11.04 billion). Of this:
- Net Fees and Commission Income amounted to $6.11 billion (2017: $6.59 billion), a decrease of 7% relative to the corresponding period in 2017. The performance was, “ impacted by the ongoing shift from branch transactions to online and mobile transactions which attract lower fees.”
- Insurance Revenue climbed by 6% and closed the period at $2.40 billion relative to $2.27 billion last year. SGJ noted, insurance revenue was impacted, “due to growth in core insurance business and actuarial reserve releases from changes in assumptions on valuation of the portfolios”.
- Net Foreign Currency Activities increased by 116% and amounted to $3.61 billion (2017: $1.67 billion), SGJ noted that this was, “based on increased market activities and revaluation gains”.
- Net Gains on Financial Assets improved to $1.02 billion relative to $447.80 million recorded in 2017.
- Gain on disposal of subsidiary totalled $753.14 million as the company noted this, “relates to Scotia Jamaica Micro Finance Company Limited (Credi-Scotia), which was sold effective December 1, 2017.”
- Other revenue declined from $65.22 million to $22.90 million, a decline of 65%
As such, Total Operating Income for the period increased 8% to total $31.86 billion versus $29.48 billion for the corresponding period in 2017. Total Operating Income for the quarter amounted to $9.65 billion, 1% lower than the $9.79 billion booked for the same quarter of 2017.
Total Operating Expenses for the nine months amounted to $16.26 billion, a 1% growth from the $16.12 billion booked for the corresponding period in the prior financial year.
Under operating expenses:
- Salaries and Staff Benefits decreased to close the period at $7.59 billion (2017: $8.00 billion).
- Property Expenses (Including Deprecation) fell by 4% amounting to$1.51 billion (2017: $1.57 billion).
- Amortization of Intangible Assets increased 22% to close the period at $116.21 million versus $95.25 million in 2017.
- SGJ reported $1.09 billion for asset tax, 2% more than the $1.07 million documented for the same period for 2017.
- Other Operating Expenses increased by 11% and closed the period at $5.96 billion relative to $5.38 billion in 2017.
Profit before Taxation for the period totaled $15.60 billion; this represents an increase of 17% from the $13.36 billion recorded in 2017.
Tax charges for the period totaled $4.44 billion (2017: $4.37 billion), as such Net Profit for the period totaled $11.16 billion, 24% more than the $8.99 million posted for the same period in 2017. Profit for the quarter amounted to $4.40 billion, 33% less than the total of $3.30 billion a year earlier.
Profit attributable to shareholders for the period totaled $11.16 billion, a 27% increase on the $8.81 billion recorded in 2017. Profit attributable to shareholders for the third quarter totaled $4.40 billion compared to $3.21 billion booked for the comparable period of 2017.
Earnings per share (EPS) for the period totaled $3.59 (2017: $2.83), while earnings per share for the quarter totaled $1.41 (2017: $1.03). The trailing earnings per share amounted to $4.67. The total number of shares employed in our calculations amounted to 3,111,572,984 units. Notably, SGJ’s stock price closed the trading period on September 13, 2018at a price of $56.32
Balance Sheet Highlights:
As at July 31, 2018, the company’s assets totaled $535.15 billion, 7% more than its value of $501.18 billion last year earlier. The increase in total assets was primarily driven by increases in ‘Cash Resources’ by $11.60 billion to total $145.73 billion, ‘Investment Securities’ also increased by $17.31 billion to a total of $130.49 billion. Loans, after allowance for impairment losses also contributed to the upward movement with an 8% increase to $176.98 billion (2017: $163.88 billion). This was however offset by the 28% decline in ‘Pledged assets’ to $26.81 billion (2017$45.79 billion)
SGJ’s shareholders’ equity at the end of the period amounted to $112.90 billion relative to the $96.99 billion recorded in the prior year’s corresponding quarter. Consequently, the book value per amounts to $36.29 (2017: $31.17).
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