For the three months ended January 31, 2018, Scotia Group Jamaica Limited’s (SGJ) Net Interest Income marginally increased by 0.16% to $6.64 billion, moving from $6.62 billion for the corresponding period in 2017, while Interest Expenses declined by 25.80% to total $850.34 million (2017:$1.15 billion). Interest Income for the period decreased from $7.77 billion in 2016 to $7.49 billion.
The company reported an Impairment Gain on Loans of $6.23 million compared to the loss of $420.72 million for the comparable period in 2017. As such, Net Interest Income after Impairment losses on loans grew 7.05% to $6.64 billion relative to the $6.20 billion recorded for the corresponding period in 2017.
Total Other Revenue increased by 44.64% to $4.96 billion (2017: $3.43 billion) .The Company noted, “Our performance was largely driven by growth in our core business as well as gains from the sale of our microfinancing business (Credi-Scotia).”
Net Fees and Commission Income amounted to $2.10 billion (2017: $2.25 billion), a decrease of 6.57% relative to the corresponding period in 2017. The performance according to SGJ was “impacted by continuous customer education on alternatives to reduce fees and increased free transactions.”
Insurance Revenue climbed by 93.72% and closed the period at $1.17 billion relative to $604.24 million 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 68.69% and amounted to $792.75 million (2017: $469.96 million), SGJ noted that this was “based on increased market activities”.
Net Gains on Financial Assets improved to $132.04million relative to $54.32 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 $50.86 million in the first quarter of 2017 to $8.41 million, a decline of 83.46%.
As such, Total Operating Income for the first quarter increased 20.42% to total $11.60 billion versus $9.63 billion for the corresponding period in 2017.
Total Operating Expenses for the first three months amounted to $6.37 billion, a 6.97% growth from the $5.95 billion booked for the corresponding quarter in the prior financial year.
Under operating expenses:
- Salaries and Staff Benefits increased to close the period at $2.67 billion (2017: $2.48 billion).
- Property Expenses (Including Deprecation) fell by 2.97% amounting to$488.66 million (2015: $503.60 million).
- Amortization of Intangible Assets increased 18.47% to close the period at $37.62 million versus $31.76 million in 2017.
- SGJ reported $1.12 billion for asset tax, 4.79% more than the $1.06 million documented for the first quarter of 2017.
- Other Operating Expenses increased by 9.87% and closed the quarter at $2.05 billion relative to $1.86 billion.
Profit before Taxation for the quarter totaled $5.23 billion, this represents an increase of 42.18% from the $3.68 billion recorded in 2016.
Tax charges for the quarter totaled $1.82 billion (2017: $1.47 billion), as such Net Profit for the period totaled $3.41 billion, 55.33% more than the $2.21 million posted for the same period in 2017.
Profit Attributable to Shareholders amounted to $3.41 billion, 56.41% more than the total of $2.18 billion a year earlier.
Earnings per share (EPS) for first three months totaled $1.10 (2017: $0.70), the trailing earnings per share amounted to $4.31. 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 March 8, 2018, at a price of $51.22.
The company noted, “Board of Directors approved an interim dividend of 48 cents per stock unit in respect of this first quarter, which is payable on April 18, 2018 to stockholders on record as at March 27, 2018.”
Balance Sheet Highlights:
As at January 31, 2018, the company’s assets totaled $502.04 billion, 4.56% more than its value a year earlier. The increase in total assets was primarily driven by increases in ‘Cash Resources’ by $11.57 billion to total $119.60 billion, ‘Retirement benefit assets’ by $7.64 billion to a total of $25.39 billion and in ‘Investment Securities’ by $19.64 billion to $133.69 billion.
SGJ’s shareholders’ equity at the end of the first quarter amounted to $104.90 billion relative to the $92.79 billion recorded in the prior year’s corresponding quarter. Consequently, the book value per amounts to $33.71 (2017: $29.82).
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