December 11, 2023

Scotia Group Jamaica Limited (SGJ) for the year ended October 31, 2023, reported a 31% increase in Interest income totalling $40.84 billion compared to $31.20 billion in the corresponding period last year. Interest income for the fourth quarter had a 22% increase to close at $11.59 billion compared to $9.50 billion for the comparable quarter of 2022.

Interest expense amounted to $1.38 billion (2022: $579.79 million), this represents an increase of 138% year over year. Consequently, net interest income increased by 29% to $39.46 billion compared to $30.62 billion for the year end ended 2022. The company booked net interest income of $11.13 billion for the fourth quarter versus $9.35 billion reported for the similar quarter of 2022.

Expected credit losses decreased by 22% to close at $2.40 billion (2022: $3.06 billion), SGJ noted, “The Group’s credit quality remains strong, and we are well provisioned for both our performing and non-performing loans, ensuring adequate coverage for possible future non-performing loans”.

Net interest income impairment losses on loans increased by 34% from $27.57 billion in 2022 to $37.06 billion in the period under review. Total insurance finance expenses for the year amounted to $1.83 billion, a 20% increase relative to $1.53 billion reported in 2022.

Net insurance revenue for the year amounted to $1.82 billion compared to $884.69 million in 2022.

Management noted that the growth in total revenues was “primarily driven by an increase in net interest income of $8.8 billion stemming from the strong growth in our loan portfolio, higher insurance revenue, higher gains on foreign currency activities as well as higher fee and commission income earned given the significant increase in transaction volumes.”

Total operating income for the year amounted to $53.07 billion, a 32% increase relative to $40.08 billion reported in 2022. Total operating income for the fourth quarter amounted to $13.21 billion (2022: $10.69 billion). Total operating expenses totalled $27.63 billion, a 12% increase driven by higher technical support fees arising from the higher transaction volumes. (2022: $24.71 billion).

Profit before taxation for the year amounted to $25.44 billion, a 66% increase relative to $15.37 billion reported in 2022. Profit before taxation for the fourth quarter amounted to $6.40 billion (2022: $4.76 billion).

Taxation for the year had a 63% increase to reach $8.21 billion (2022: $5.05 billion). Net Profit for the year end amounted to $17.23 billion, a 67% increase from the $10.32 billion reported in 2022. For the fourth quarter, Net Profit was $4.44 billion (2022: $2.98 billion).

For the year, net profit attributable to shareholders amounted to $17.23 billion relative to $10.32 billion reported a year prior. For the quarter, net profit attributable to shareholders was $4.44 billion (2022: $2.98 billion).

Consequently, Earnings per share for the year end amounted to $5.54 (2022: EPS: $3.32), while Earnings per share for the quarter totaled $1.43 (2022: EPS: $0.96). The number of shares used in these calculations was 3,111,572,984.

Notably, SGJ’s stock price closed the trading period on December 08, 2023, at a price of $33.97 with a corresponding P/E ratio of 6.14x.

Balance Sheet Highlights

The company’s assets totalled $664.74 billion (2022: $594.42 billion). This resulted from a 21% increase in ‘Cash Resources’ closing at $178.61 billion. The increase noted was primarily attributable to the growth in SGJ’s core deposits.

Shareholder’s equity was $126.55 billion (2022: $106.36 billion), representing a book value per share of $40.67 (2022: $34.18).

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