Sagicor expects business boom from PetroCaribe debt buy-back

Concurrently, the group posted net profit of $2.3 billion for its second quarter ending June 30, or 25.4 per cent higher than profits of the comparative quarter last year.

“The Jamaican economy continues to perform well in respect of all indicators except GDP growth, which remains low. Factors such as higher businessconfidence, improved ratings, and the buy-back of PetroCaribe debt at a discount will support continued positive economic trends,” Group President and CEO Richard Byles stated in a statement to shareholders.

“All of the driving factors will not remain at the same level but we anticipate goodbusiness growth and improved expense efficiencies as the year unfolds,” he added.

The financial conglomerates profits for the quarter was strongly subsidised by net investment income, which climbed to $5.03 billion up from $2.53 billion quarter over quarter, or 98.7 per cent higher than earnings in 2014. Byles stated that the 2015 numbers included the recent acquisition of RBC Royal Bank of Jamaica Limited (RBC), recovered interest on an impaired loan, along with other organic growth of the conglomerate.

“This strong performance was principally driven by significant capital gains on sale of investment securities, the inclusion of the RBC portfolio in 2015, higher than expected recoveries on delinquent loans in Sagicor Bank, and overall good earned premiums and favourable insurance benefits experience” he stated.

Last June, Sagicor acquired RBC Royal Bank for $9 billion. Post-acquisition losses of the company were $558 million which included rebranding and restructuring costs. Despite the setback, Sagicor made $8.5 billion in net profit for its December year end 2014.

For the current quarter, all segments produced profits for the six-month period, which were better than the prior year, except for the employee benefits division where the 2014 results were assisted by large annuity contracts recognised in the first quarter of 2014. The commercial banking division reported the highest profit, which grew to $813 million – up from $206 million over comparative periods – followed by investment banking.

The results were achieved despite much higher asset taxes being fully expended in the first quarter. Total assets of the company grew to 289 billion up from 258 million, while stockholders equity stood at 47.5 billion, or 15.5 per cent higher than the previous quarter.




 

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