SGJ reports 35% increase in year end net profit

January 20, 2023

For the year ended October 31 ,2022 Scotia Group Jamaica Limited’s (SGJ) net interest income increased 26% to amount to $28.62 billion, relative to $22.71 billion for the corresponding period in 2021, while interest expenses declined by 4% to total $1.78 billion (2021: $1.86 billion). Interest income for the year increased from $24.57 billion in 2021 to $30.40 billion for the period under review.

The company reported expected credit loss of $3.06 billion compared to the loss of $2.81 billion for the comparable period in 2021. As such, net interest income after expected credit losses for the year rose by 26% to $25.56 billion relative to the $19.90 billion recorded for the corresponding period in 2021.

Total other revenue decreased by 4% to $17.23 billion (2021: $17.91 billion). Of this:

    • Net fees and commission income amounted to $6.18 billion (2021: $6.09 billion), an increase of 1% relative to the corresponding period in 2021.
    • Insurance revenue rose by 15% to close the period at $3.04 billion relative to $2.63 billion last year.
    • Net foreign currency activities decreased by 5% and amounted to $7.21 billion (2021: $7.56 billion).
    • Net losses on financial assets amounted to $141.28 million relative to the gain of $604.43 million recorded in 2021.
    • Other revenue decreased from $1.02 billion to $950.67 million, a decrease of 7%.

As such, total operating income for the year increased by 13% to a total $42.79 billion versus $37.81 billion for the corresponding period in 2021.

Total operating expenses for the year amounted to $25.59 billion, a 2% growth from the $25.14 billion booked for the corresponding period in the prior financial year.

Under operating expenses:  

    • Salaries and staff benefits increased to close the year at $10.31 billion (2021: $9.48 billion).
    • Property expenses (including depreciation) amounted to $2.51 billion (2021: $2.33 billion).
    • Amortization of intangible assets increased by 23% to close the period at $119.65 million versus $97.67 million in 2021.
    • SGJ reported $1.32 billion for asset tax, 8% more than the $1.22 billion documented for the same period for 2021.
    • Other operating expenses decreased by 6% and closed the year at $11.34 billion relative to $12.02 billion in 2021.

Profit before taxation for the period totaled $17.20 billion; this represents an increase of 36% from the $12.70 billion recorded in 2021.

Tax charges for the period totaled $5.52 billion (2021: $4.03 billion), as such net profit for the year totaled $11.68 billion, 35% more than the $8.64 billion posted for the same period in 2021.

Total comprehensive income for the year totaled $1.21 billion, relative to $7.90 billion posted for the same period in 2021. .

Earnings per share (EPS) for the year totaled $3.75 (2021: $2.78). 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 January 20, 2023 a price of $34.01 with a corresponding P/E of 9.06 times.

Balance Sheet Highlights:

As at October 31,2022, the company’s assets totaled $595.60 billion, 2% more than its value of $585.44 billion last year earlier. The increase in total assets was primarily driven by an increase in ‘Loans, net of allowance for credit losses’ to total $237.79 billion (2021: $208.52 billion).

SGJ’s shareholders’ equity at the end of the period amounted to $110.85 billion relative to the $113.60 billion recorded in the prior year. Consequently, the book value per share amounted to $35.62 (2020: $36.51).