Scotia Group mortgages still growing in competitive market
Published:Wednesday | June 12, 2024 | 12:05 AM
The growth of Scotia Group Jamaica’s mortgage loan portfolio continues to outpace other loan categories.
On the back of robust growth in loans, overall, the banking group reported bigger profits in the second quarter ending April, up 30 per cent year on year to $5.4 billion. Revenue also rose to $14.5 billion from $12.6 billion.
“We are well known for managing risk,” said Scotia Group President & CEO Audrey Tugwell Henry. “For us, it is not just growing the mortgage book but satisfying a financial service need for our clients.”
Customers unable to repay their loans represent just 1.6 per cent of total loans, which, Tugwell Henry noted, is a favourable position compared to the broader market.
“It is the best in case, and better than the market,” she said.
The banking group’s total loan book at $282 billion experienced growth of 14 per cent on average. Mortgages increased by the largest proportion, up 24 per cent year on year, consumer loans rose by 13 per cent, credit cards by 15 per cent, and commercial loans by 8.0 per cent. It was the second year of growth beyond 20 per cent for mortgages over 20 per cent, said Tugwell Henry, who described the approval process as rigorous and robust.
“So we know that we have a very competitive mortgage product,” the bank president said.
Across the financial system, past due loans which are unserviced from one to three months, jumped 30 per cent to $43 billion as of March 2024, up from $32.5 billion the previous year, according to industry data published by the Bank of Jamaica. After 90 days, past due loans are categorised as non-performing. These loans, if not rectified with principal payments, eventually become classified as bad debt.
Among past due loans across the banking system, consumer loans, including residential mortgages, rose from $20.4 billion to $26.6 billion, marking the highest annual rise in past due loans since 2017. Consumer loans is the largest category of bank loans.
“Owning a home is the dream of every Jamaican and we are very pleased at Scotia Group that we can meet that need and help a number of Jamaicans to satisfy that desire,” said Tugwell Henry. “It also drives generational wealth,” she added.
Scotia Group is largely in the business of commercial banking, but it also operates an insurance company, an investment firm, and a building society, otherwise called a mortgage bank. Scotiabank is the second largest banking outfit in Jamaica.
The group as of April held assets of $676 billion, while its book value or capital base was just under $127 billion.