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Scotiabank profits down by $23m
Scotiabank T&T’s profit after tax of $148 million for the quarter ended January 31, is a decrease of $23 million or 13 per cent over the same period last year.
This reduction in profitability was driven by higher levels of loan loss provisioning combined with increased corporation tax rates levied on commercial banks at 35 per cent.
Managing director Stephen Bagnarol said: “The bank’s performance for the first quarter of fiscal 2018 is indicative of the challenging economic environment in which we operate. In light of these conditions, we continue to adopt robust expense management initiatives and credit risk management policies.
“As a result, our core performance continues to be driven by solid growth in our retail business combined with a containment of expenses and conservative loan loss provisioning.”
Concurrent with the decline in profitability, Earnings Per Share (EPS) decreased to 83.3 cents, return on equity to 15.05 per cent and return on assets to 2.44 per cent, compared to January 31, 2017.
Brendan King, chairman of Scotiabank T&T, told shareholders at the bank’s annual general meeting at the Hyatt Regency in Port-of-Spain yesterday that despite difficult circumstances, the bank is optimistic about the country’s future.
“Turning to Trinidad and Tobago, the economic climate is starting to turn more promising with positive Gross Domestic Product (GDP) growth of 1.9 per cent projected for 2018, an improvement from negative GDP growth of 3.2 per cent in 2017 and 0.6 per cent in 2016. Crude oil prices are on the rise since September last year and currently are above the US$52 barrel mark upon which the Trinidad and Tobago budget is based,” he said.
While, the latest quarter reflected a decline over the same period last year, the financial year ended October 31 showed positive results for the bank which achieved net income of $658 million—an increase of $32 million or five per cent over the same period in 2016.
“This was achieved in spite of of the increased tax rate now in place on commercial banks of 35 per cent, up from 25 per cent two years ago. I note that global trends are to a reduction in corporate tax rates in order to support private sector investment and growth and I suggest that Trinidad and Tobago will need to further consider these issues in planning tax policies,” King said.
In response to comments from shareholders Bagnarol spoke about another bank’s recent branch closures: “I don’t want to comment on a competitor’s strategy but I would say that we constantly review our resources and footprint. The idea of going digital is not about taking people out of the branches it is about changing the conversation and having a dialogue.
“We are trying to move along with changing consumer habits. Our customers are the same ones using Uber, that are shopping on Amazon, and they are constantly demanding more from us on a digital channel. Let us have the branches there to have dialogue.”
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