Scotia Group Jamaica Limited (SGJ) for the year ended October 31, 2017 booked an improvement in net interest income which totalled $26.64 billion, moving from $25.38 billion in the corresponding period in 2016, while interest expenses declined by 12% to total $4.32 billion (2016: $4.90 billion). Interest income for the period increased marginally from $30.27 billion in 2016 to $30.97 billion. Net interest income for the quarter amounted to $6.72 billion, up 2% relative to $6.60 billion booked for the prior year’s corresponding quarter.

Impairment losses of loans increased 52% to $2.18 billion compared to $1.43 billion for the comparable period in 2016. As such, Net Interest Income after Impairment losses on loans grew to $24.47 billion relative to the $23.94 billion recorded for the corresponding period in 2016.

Total Other Revenue increased by 12% to $15.03 billion  relative to $13.39 billion in 2016. See breakdown below:

• Net Fees and Commission Income amounted to $8.64 billion (2016: $7.02 billion), an increase of 23% relative to the corresponding period in 2016. According to management this was, “driven by higher transaction volumes and the growth in our credit card, merchant services, and asset management business.”
• Insurance Revenue rose 18% and closed the period at $2.79 billion relative to $2.37 billion last year. According to SGJ, “due to growth in core insurance business and actuarial reserve releases from changes in assumptions on valuation of the portfolios.
• Net foreign exchange trading income decreased by 31% and amounted to $2.49 billion (2016: $3.63 billion).
• Net gains on financial assets rose to $1.03 billion relative to $344.82 million in 2016, a 200% surge year over year.
• Other revenue improved by 144% to total $75.02 million compared to $30.76 million in 2016.

Total revenues excluding impairment losses on loans for the year ended October 31, 2017 was $41.7 billion, representing an increase of $2.9 billion or 7% above prior year. There was increased retail loan and transaction volumes across our business lines, as well as improved non‐interest revenue

Total Operating Income increased by 6% to total $39.49 billion versus $37.34 billion for the corresponding period in 2016.

Total Operating Expenses for the year end amounted to $21.29 billion, a 3% growth from the $20.70 billion booked for the prior year.  Under operating expenses:

• Salaries and Staff Benefits increased by 2% and closed the period at $10.64 billion (2016: $10.43 billion).
• Property expenses (including deprecation) increased by 5% amounting to $2.11 billion (2016: $2.02 billion).
• Amortization of  intangible assets increased 16% to closed the period at $146.90 million versus $127.01 million in 2015.
• Other operating expenses increased by 2% and closed the year at $7.32 billion relative to $7.16 billion.

Profit before Taxation totaled $18.20 billion, this represents an increase of 9% from the $16.64 billion recorded in 2016.

Tax charges for the year totaled $5.79 billion (2016: $5.05 billion), as such Profit for the year totaled $12.41 billion, 7% more than the $11.59 million posted last year.

Profit attributable to shareholders amounted to $12.17 billion, 8% more than the total of $11.30 billion a year earlier.

Earnings per share (EPS) for year-end totaled $3.91 (2015: $3.63), while EPS for quarter totaled $1.08 (2016: $1.00). The total number of shares employed in our calculations amounted to 3,111,572,984 units. Notably, the stock price closed the trading period on December 07, 2017 at $52.57.

Balance Sheet Highlights:

At the financial year, the company’s assets totaled $490.88 billion, 3% more than its value a year ago. The increase in total assets was primarily driven by increases in ‘cash resources’ by $10.20 billion to a total of $116.48 billion and in ‘Retirement Benefits Assets’ by $7.65 billion. ‘Investments Securities’ also contributed to the increase in the total assets base with a $3.17 billion increase year over year to $120.29 billion (2016: $117.12 billion). SGJ noted, “Our cash resources held to meet statutory reserves and the Group’s prudential liquidity targets stood at $116.5 billion, up from $106.3 billion last year due to increased liquidity from inflows of retail and commercial deposits. We continued to maintain adequate liquidity levels to enable us to respond effectively to changes in cash flow requirements.”

Management also noted, “Our loan portfolio was flat year over year closing at $166.5 billion as at October 31, 2017, driven by an overall decline in our foreign currency portfolio.  Our small business, residential mortgages and personal loans continue to show solid performance quarter over quarter and year over year.”

SGJ ended the year with shareholders’ equity in the amount of $102.43 billion relative to the $91.86 billion recorded at the end of  the 2016 financial year.  The book value per share is now $32.92 (2016: $29.52).

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