June 9, 2023
Scotia Group Jamaica Limited (SGJ) reported an increase in Net Interest Income to $18.49 billion, moving from $13.32 billion for the corresponding period in 2022. Net interest income for the quarter amounted to $9.38 billion relative to $6.85 billion reported in 2022.
SGJ noted there was strong growth in their loan portfolio, higher insurance revenue as well as higher fee and commission income earned given the significant increase in transaction volumes.
The company reported Expected Credit Losses of $1.18 billion compared to a loss of $1.23 billion for the comparable period in 2022. SGJ highlighted, “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”.
As such, Net Interest Income after Expected Credit Losses on loans rose 43% to $17.32 billion relative to the $12.09 billion recorded for the corresponding period in 2022.
Total Other Revenue rose by 19% to $8.29 billion versus $6.97 billion recorded for the six months ended April 30, 2022.
Total Operating Income for the year to date increased 40% to total $26.02 billion versus $18.60 billion for the corresponding period in 2022. Total Operating Income for the quarter amounted to $12.71 billion (2022: $9.16 billion), reflecting a 39% increase when compared to the comparable quarter last year.
Total Operating Expenses for the period amounted to $14.44 billion, an 11% growth from the $12.96 billion booked in 2022. As for the quarter, total expenses amounted to $6.57 billion, 14% increase year over year from the $5.77 billion reported in 2022. The increase was driven by higher technical support fees arising from the higher transaction volumes.
Profit before Taxation for the six months totaled $11.59 billion, this represents a 105% rise from the $5.64 billion recorded in 2022. For the quarter pre-tax profit rose by 81% to $6.14 billion (2022: $3.39 billion).
Tax charges for the six months totaled $3.96 billion (2022: $1.98 billion). As such, Net Profit for the period totaled $7.63 billion, 108% more than the $3.66 billion posted for the same period in 2022. Net profit for the second quarter closed at $4.21 billion relative to $2.41 billion for the same quarter of 2022.
Net profit attributable to shareholders amounted to $7.63 billion (2022: $3.66 billion). While for the quarter, net profit attributable to shareholders closed at $4.21 billion (2022: $2.41 billion).
SGJ highlighted, “The Group’s performance continues to be anchored by solid growth across all our business lines, prudent risk management and efficient management of our operations. We remain laser-focused on our strategy, and this has allowed us to maintain momentum across our lines of business supported firmly by our ongoing customer service improvements and digital transformation initiatives.”
Earnings per share (EPS) for six months totaled $2.45 (2022: $1.18). EPS for the second quarter amounted to $1.35 versus $0.77 reported for the second quarter of 2022. The trailing twelve months EPS amounted to $5.03. The total number of shares employed in our calculations amounted to 3,111,572,984 units. Notably, SGJ last traded on June 9, 2023, at a price of $33.60 with a corresponding P/E of 6.68x.
Balance Sheet Highlights:
As at April 30, 2023, the company’s assets totaled $633.03 billion (2022: $605.33 billion), 5% more than its value a year earlier. SGJ noted, “this was predominantly as a result of the significant growth on our loan portfolio of $42.1 billion or 20.3% and higher cash resources of $18.4 billion or 11.3%. This was partially offset by a reduction in other assets of $19.5 billion or 35.9% on account of the lower carrying value of the retirement benefit asset as well as lower investment securities of $10.4 billion or 6.4%”.
SGJ’s shareholders’ equity at the end of the period amounted to $109.30 billion relative to the $112.77 billion recorded in the prior year’s corresponding quarter. Consequently, the book value per amounts to $35.13 (2022: $36.24).
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