Scotia comes out as top dog

In particular, its operations in the Dominican Republic posted strong growth, reporting a remarkable 36.61% return on equity (ROE) last year, said Latin Finance in its November 2005 issue.

Scotiabank entered the market when it bought failed Banco Intercontinental from the government three years ago. "Our share market is growing. We are deepening and acquiring relationships with customers in the Dominican Republic. We expect outstanding results from our franchise there," said Pat Minicucci, the international senior vice president for Scotiabank with responsibility for the bank’s English-speaking Caribbean operations.

Scotiabank’s growing branch network is part of that strategy. Scotiabank branches grew 18.48% in 2005 to 357 branches throughout the Caribbean and Central America. It matched that growth with impressive returns on equity. It’s operations in the two largest economies in the region — Trinidad and Tobago and Jamaica — ranked first and second in their markets in terms of ROE

(return on investment).

Scotiabank Jamaica had the highest ROE in that country last year, at 29.85%, and Trinidad, the most competitive market, booked at 23.5% return.

"ROE has been pretty consistent over the past five years as a result of the combination of strong organic growth, improved operating efficiencies and acquisitions contributing to revenue growth, Minicucci said.

The bank improved its operating efficiencies in part by implementing a new sales and service programme originated in Canada last year. Minicucci said this "centralises back-office operations to allow our sales staff to spend more time with customers face to face." He says streamlining administrative tasks won’t mean closing any branches.

Staff will also become more focused on service and sales. "We have seen tremendous retail loan growth, in excess of 20% a year, said "Minicucci, who also expects growth in insurance, mutual funds and wealth management.

Minicucci expects the continued appreciation of the Canadian dollar to challenge Scotiabank going forward. Scotiabank’s net income for the Caribbean and Central America fell to C$280 million ($375 million) last year from C$290 million ($$70 million) in 2002. "Net income grew by 7% over the same second quarter last year to C$750 million, but if you exclude impact of foreign currency, it was 13%," Minicucci says. "We continue to manage the appreciation of the Canadian dollar as it does have an impact on our earnings."