As government borrowing continues to dry up, Scotiabank Jamaica Group is ready to go to battle for a large share of the private sector loans market.
This aggressive push towards a greater market share of the private sector loan market comes as the government’s borrowing is drying up. The shift in focus is informed by the announced measure by Finance Minister Dr Nigel Clarke last Tuesday of paying off as much as $73-billion in debt this fiscal year, in particular for bonds maturing this year, rather than borrowing to pay off principal payments, as they are due.
Addressing Scotiabank’s annual general meeting, Thursday, March 12, President and CEO, David Noel was adamant that further profitability for the bank lies less in government loans and more on private sector credit. He told shareholders that private-sector loan growth represents the biggest opportunity for growing the bank.
“We are focused on loans to the private sector, we have loans with the government as well as other entities but private-sector loan growth is what we are focused on,” Noel declared. He also spoke about the growth in mortgages to the private sector, which is also being targeted this year for greater market share and greater profitability.
Noel made specific reference to mortgages for first-time homeowners. The Scotiabank boss said that private sector loan growth for 2019 was 27% year over year pointing out that the bank has been lending in many areas of business and commerce.
“We have loans with the government…but private-sector loan growth is what we are focused on.”—
He stated, “despite the challenges that will come with COVID 19 we are there for our customers, we have the capital and liquidity to support our customers and we will be doing that. We expect that number (loan growth) to grow even further over time.”
For 2019 Scotiabank Group reported strong growth in its core business with its total loan portfolio increased year over year by 13%. This includes an increase of 17% over the prior year in Scotia Plan retail loan portfolio, and another year of double-digit growth for the mortgage portfolio, which increased by 13%.
For 2019 the group recorded net income after tax of $13.2 billion for the year, which represents an increase of $419 million or 3% versus the previous year. Excluding gains on the sale of a subsidiary of $753 million that occurred in the prior year, net income increased year on year by $1.2 billion or 10%.
Mobile banking app
Noel announced that launched of Scotiabank’s new mobile banking app, which possesses a number of security features as well as easy access to online banking services.
He emphasized that “the mobile banking app will be delivering real value for customers while ensuring you are protected as you bank.”
The Scotiabank President and CEO welcomed the reduction in the assets tax on banks as well as the reduction in General Consumption Tax, which he said is a step in the right direction in stimulating growth in the economy.