Scotia outlook stable amid recession and loan stress
Published:Wednesday | December 17, 2025 | 12:05 AM
The financial conglomerate Scotia Group Jamaica (SGJ) made $20 billion profit for its October 2025 financial year, or roughly $150 million less than a year ago, as provisions tied to Hurricane Melissa offset otherwise steady banking operations.
The outlook for SGJ remains stable despite the government’s forecast of a recession in 2026. The bank has consistently delivered strong performance through previous national disasters and remains confident in its ability to do so again, said Audrey Tugwell Henry, president and CEO of SGJ, during a virtual media briefing held on Thursday.
“We are a strong financial institution and well-positioned to navigate this situation, and we made additional credit provisions,” she, however, declined to disclose the group’s profit forecast publicly.
SGJ is the island’s second largest bank, and for over a century managed to grow through shocks aided by its debt-free balance sheet, and avoidance of high-risk lending and investments. Additionally, the group can “tap” into resources from its Canada-based parent.
The storm passed the island just three days before SGJ’s October year end. On the revenue side, the group generated $65 billion, up from $59.2 billion in 2024, but higher staff costs, and hurricane provisions hurt profit.
“In our fourth quarter, we recorded non-recurring expenses totaling $817 million dollars, which included charges related to efficiency efforts, a write down of physical assets and credit provisions related to Hurricane Melissa,” stated the preface to the financial report. “We believe that it was prudent to take additional provisions considering the unprecedented impact of the hurricane.”
SGJ stated that its Black River, Savanna-la-Mar and Falmouth buildings sustained damage, though all locations have since reopened. Black River had already ceased operating as a branch prior to the hurricane, but its ATM machines were affected. The group emphasised that physical repairs were undertaken to restore service.
A measure of lending weakness, non-performing loans (NPLs) stood at $4.8 billion as of October, or 1.3 per cent of its loan book. That figure is roughly half the industry average of 2.5 per cent to September, which itself is well within the target limit of 5.0 per cent set by the regulator. Tugwell Henry said the executives conducted internal risk assessments and stress tests to measure the impact of the storm on its portfolio. In response, the group offered loan moratoriums to clients in the hardest-hit areas, a move designed both to ease customer burdens and to maintain acceptable non-performing loan ratios. Executives noted that this dual approach was aimed at preserving confidence.
Looking closer at the strategy, Tugwell Henry indicated that the bank drew on its “tool kit” developed during COVID-19, known as the customer assistance programme. She noted that within five days of the hurricane, SGJ had executed the initiative. “Clients also have the opportunity to engage with us in reorganising their debt,” she said, adding that the swift implementation had proved very helpful to customers both during the pandemic and following Hurricane Beryl in 2024.
As the second-largest financial group by assets, SGJ remains closely tied to the fortunes of the wider economy. The pace of recovery, Henry suggested, will be aided by the capital city.
“It was a blessing, in a way, that Kingston was not as negatively impacted by the hurricane. Jamaica is therefore in a better position to rebuild post Melissa,” she said, noting that commerce and communities are concentrated in Kingston, St Andrew and St Catherine.
Across the financial sector, prior to Hurricane Melissa, some $84.2 billion in loans had already been classified as past-due or non-performing up to September. Past-due loans, unserviced for more than 30 days, totalled $41.4 billion, while non-performing loans, unserviced for 90 days or more, amounted to $42.8 billion, according to Bank of Jamaica data.
“We are confident that we will not see a negative impact on our performance,” she added.
Management indicated that its capital base and liquidity remain strong, positioning it to absorb shocks and support recovery. The group’s asset base grew by $68.8 billion, or 9.8 per cent, to $773.8 billion as at October 2025. Capital totalled $150.5 billion, reflecting an increase of 8.7 per cent compared with October 2024.
Total assets across the eight commercial banks totalled $2.75 trillion. It is led by National Commercial Bank, a subsidiary of NCB Financial Group holding $981 billion or one-third of total assets, followed by Bank of Nova Scotia, a subsidiary of SGJ with $680 billion or one-quarter of assets, and JN Bank with $290 billion or about 10.5 per cent of total assets.