11th consecutive year of growth for Scotiabank

The year 2003 represented the 11th consecutive year of growth for Scotiabank Trinidad and Tobago, which recorded a profit, after taxation, of $194.7 million for the year ended October 31, 2003, an increase of $14.3 million or eight percent.

This performance was the result of the excellent results of Scotia’s subsidiary, Scotiatrust and Merchant Bank Trinidad and Tobago Limited, which saw an increase in Net Income by 122 percent over the last seven years. So said Scotiabank Managing Director, Richard Young, as he addressed the banks 34th Annual General Meeting, which was held yesterday at the Hilton Hotel and Conference Centre. Young revealed that the banks consolidated assets totalled $7.5 billion at the end of 2003, an increase of 1.2 percent from the previous year. Increased loans to customers accounted for $167 million of the increase, with strong growth being noted in the residential mortgage portfolio, which now makes up 26 percent of the bank’s loan portfolio. Additionally, he said, Scotia’s balance sheet has grown by approximately 65 percent over the last seven years.

Young went on to note that the overall composition of the loan portfolio remained constant during the year, showing no significant changes in sector percentages. Overall net interest income, he said, increased by $20.3 million or 5.6 percent to $381.8 million, driven primarily by a combination of increased volumes and lower funding costs as interest rates declined during the year. The Group’s net interest margin stood at 5.12 percent, an increase of 14 basis points from 2003. Earning assets concurrently increased by $147.0 million during the course of the year. According to Young, who is also President of the TT Banker’s Association, other income was re-corded at $149.3 million, showing a moderate increase of $3.6 million or 2.5 percent from the prior year. Fees and commission income, he continued, rose by 2 percent, a probable result of higher transaction volumes, in addition to a growth in mortgage and credit card related revenues.

Furthermore, ex-change earnings declined by 1.7 percent, with spreads remaining relatively flat over the course of the year. “The biggest contribution to the overall growth in other income,” Young stated, “was in the other operating income category, which rose a substantial 96.9 percent or $2.3 million.” Loan Losses for 2003 decreased by $3.6 million or 11 percent year over year, and was attributed to a focused effort in the bank’s collections and astute management of delinquent loans and prudent lending policies. “Our Loan Losses are notable less than our competition. The Group’s provisioning policy complies with the regulatory requirements, in addition to Scotiabank’s policy of best practices as an international bank,” Young maintained.

Where the value of Scotiabank’s shares are concerned, 2003 saw share price rising to $27.25 from $20.11, which Young noted was indicative of the confidence expressed in the Bank’s performance and its potential. He said, “the performance of the TT Stock Exchange Index has been plotted against our share price and it shows that our share price has enjoyed a better increase than the Index.” Young announced an accumulated 70 cents payout in 2003 to shareholders, the largest payment on record. Cumulative Dividend payment for 2003 stood at $82 million, with the Group’s market share being set at its highest at $3.2 billion.