Scotia Group Jamaica put in a creditable performance for the first quarter of 2023, posting revenues of J$13.8 billion, an increase of 38 per cent on the same period in the prior year.

This generated a net income of $3.4 billion, a $2.2 billion increase on the corresponding quarter of 2022.

Scotia Group Jamaica saw growth across all its business lines with retail loans increasing by 19 per cent and commercial loans growing by 17 per cent year over year. The integrated financial services house continues to see noteworthy growth in its mortgage portfolio, which for the period under review grew by 32 per cent.

Its loan portfolio increased by $37.6 billion or 19 per cent compared to January 2022’s figure.

Whereas some of America’s top banks are seeing a fall in deposits, Scotia Group Jamaica is experiencing the reverse, where its deposits increased to $409.4 billion, up from $380.2 billion as at January 2022. Scotia is seeing higher inflows from retail and commercial customers.

Higher interest rates continue to impact Jamaica’s financial sector and Scotia Group was no exception. Net obligations (repurchase agreements and government securities funds) fell by $3.7 billion or 20.3 per cent. Scotia is looking to offset this by growing its off-balance sheet business (mutual funds and unit trusts). As at January 2023, its asset management business dropped by $3.5 billion as a result of fair value losses. It must be noted that 28 per cent of Scotia Group Jamaica’s assets are subject to fair value assessment.

J.P. Morgan, Bank of America, and other major banking houses in the United States are seeing an uptick in unrealised losses on their government bond holdings.

Total operating expenses came in at $7.8 billion for the quarter under review, up by some $700 million on the same quarter of 2022. Salaries and Staff Benefits ($2.6 billion) remained largely the same year over year with Scotia doing a good job of containing costs and managing expenses for the quarter.

The group’s asset base grew by $13.1 billion to $604.4 billion as at January 2023. This was due in the main to growth of its loan portfolio.

There was a marginal fall in Scotia Group’s cash which came in at $166.8 billion, a drop of three per cent ($5.7 billion). Cash was used to fund its loan book and placed on investments. Scotia has drawn attention to its strong liquidity position.

Shareholders’ equity available to common shareholders came to $105.2 billion, a fall of $9.1 billion or 8 per cent when compared to January 2022’s figure.

One of the stand-out line items for Q1 2023 is net insurance revenue which jumped by $877.2 million or 258.2 per cent from negative $399.7 million to $537.5 million.

The Board of Directors approved a dividend of 25 cents per stock unit which is payable on April 20, 2023.

Commenting on this Q1, 2023 performance, Scotia Group Jamaica CEO Audrey Tugwell Henry said: “Our growth is a direct result of the successful execution of our Customer First and Winning Team strategic imperatives. Over the period under review, we have seen growing interest in our products and services resulting in strong performances across business lines. Total deposits increased by eight per cent over the prior year as customers continue to place their funds with us. Scotia Insurance delivered strong results during the quarter recording a five per cent increase in gross written premiums and a 12 per cent increase in creditor life premiums year over year.

“Online banking now represents our most used channel with 39 per cent of total transactions being conducted online and only two per cent within our branches. Digital sales also continue to grow and currently represent 36 per cent of total sales of the bank.”