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<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"><span style="font-weight: bold">Scotia's bad debt continues to climb</span>
Wednesday, February 04, 2009
Nearly half of ScotiaGroup's $89.5-billion loan portfolio is internally rated below acceptable amidst a 40 per cent jump in its non-performing loans (NPL) to some $3 billion.
The bank says that its internal rating is equivalent to Standard & Poors' five-tier rating of AAA down to B-. The internal rating by the bank for its loan and credit commitments include:
The Scotia Centre at the corner of Duke and Port Royal streets.
. Excellent - 5.0 per cent (7.4 per cent in 2007);
. very good - 0.2 per cent (0.6 per cent in 2007);
. good - 20.8 per cent (19.7 per cent
in 2007) ;
. acceptable - 25.2 per cent (29.4 per cent);
. higher risk - 48.8 per cent (42.9 per cent in 2007).
It means that the bank's higher risk loan portfolio increased over 10 per cent in a year to 48.8 per cent.
The group says its "rating scale reflects the range of default probabilities defined for each rating class".
That translated to NPLs jumping to $2.9 billion from $2.1 billion in 2007 according to the bank's just released audited annual report. The bank did not announce these figures in its unaudited report. But placed them in the middle of its 210-page tribute to outgoing president Bill Clarke.
These NPLs may be recovered as they are just in arrears over 90 days. But the bank wrote off $1 billion in bad debts over the year - 42 per cent more than in 2007, and 110 per cent more than the $475 million in 2006.
<span style="font-weight: bold">Interestingly, Scotia accounts for approximately one-third of all NPLs in the entire financial sector.</span> Bank of Jamaica data up to September (the closest to Scotia's year-end) showed $8.85 billion in NPLs in the entire financial system, climbing to levels not seen since the '90s financial crisis.
Commercial banks were hardest hit with NPLs up 55.3 per cent year on year to $5.6 billion; whilst mortgagers' NPLs grew 45.3 per cent to $2.6 billion; and near bank NPLs grew seven per cent to $599 million.l</div></div>
Wednesday, February 04, 2009
Nearly half of ScotiaGroup's $89.5-billion loan portfolio is internally rated below acceptable amidst a 40 per cent jump in its non-performing loans (NPL) to some $3 billion.
The bank says that its internal rating is equivalent to Standard & Poors' five-tier rating of AAA down to B-. The internal rating by the bank for its loan and credit commitments include:
The Scotia Centre at the corner of Duke and Port Royal streets.
. Excellent - 5.0 per cent (7.4 per cent in 2007);
. very good - 0.2 per cent (0.6 per cent in 2007);
. good - 20.8 per cent (19.7 per cent
in 2007) ;
. acceptable - 25.2 per cent (29.4 per cent);
. higher risk - 48.8 per cent (42.9 per cent in 2007).
It means that the bank's higher risk loan portfolio increased over 10 per cent in a year to 48.8 per cent.
The group says its "rating scale reflects the range of default probabilities defined for each rating class".
That translated to NPLs jumping to $2.9 billion from $2.1 billion in 2007 according to the bank's just released audited annual report. The bank did not announce these figures in its unaudited report. But placed them in the middle of its 210-page tribute to outgoing president Bill Clarke.
These NPLs may be recovered as they are just in arrears over 90 days. But the bank wrote off $1 billion in bad debts over the year - 42 per cent more than in 2007, and 110 per cent more than the $475 million in 2006.
<span style="font-weight: bold">Interestingly, Scotia accounts for approximately one-third of all NPLs in the entire financial sector.</span> Bank of Jamaica data up to September (the closest to Scotia's year-end) showed $8.85 billion in NPLs in the entire financial system, climbing to levels not seen since the '90s financial crisis.
Commercial banks were hardest hit with NPLs up 55.3 per cent year on year to $5.6 billion; whilst mortgagers' NPLs grew 45.3 per cent to $2.6 billion; and near bank NPLs grew seven per cent to $599 million.l</div></div>