Scotiabank’s bad debt portfolio raises alarm

[evanovitch]

Tuesday, 24 February 2009

Alarm bells have gone off over Scotia's ballooning bad debt portfolio.

Non-performing loans as at January 31 totalled $3.5 billion.

This was an increase of $1.3 billion when compared to a year ago, and $580 million above the previous quarter ended October 31.

Scotia said the increase in bad debt reflects the impact of current economic conditions, especially on retail loan customers.

Scotia Group's non-performing loans now represent 3.9% of total loans which is double 1.7% a year ago.

[RichD]

Re: Scotiabank’s bad debt portfolio raises alarm

i posted a while back that they had made move to accommodate customers to try to ensure that fewer loans went bad.

but 3.9% nuh sound so bad

[evanovitch]

Re: Scotiabank’s bad debt portfolio raises alarm

Two directors to be dropped from Scotia Group Board
Tuesday, 24 February 2009
Two directors of the Scotia Group are expected to be dropped from the Board when the company holds its annual general meeting on Tuesday.

Embattled former Managing Director of Bank of Nova Scotia William "Bill" Clarke and the bank's Chief Financial Officer Stacey Wright have not been included in the list of Directors up for re-election at the AGM which is scheduled to begin at 10 at the Jamaica Pegasus Hotel.

It has not been a secret that all has not been well between Mr. Clarke and the Board.

Mr. Clarke who served BNS for 40 years has been embroiled in a legal battle over his compensation package after being sent on early retirement last November.

There were reports elsewhere in the media last month that attempts were being made to replace Miss Wright on Scotia's 17 member Board.

Miss Wright, who was said to be one of the senior executives loyal to Mr. Clarke while he headed BNS, also holds the post of Executive Vice President.

[RichD]

Re: Scotiabank’s bad debt portfolio raises alarm

cleaning house

[Dr.Dudd]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">i posted a while back that they had made move to accommodate customers to try to ensure that fewer loans went bad.

but 3.9% nuh sound so bad </div></div>for Jamaica it is very bad.
They stay below 2% and that is almost twice that.
WellI suppose the new Canadian Chairman will deal with it.

[RichD]

Re: Scotiabank’s bad debt portfolio raises alarm

yuh know back in the 90s they had a reputation for being very conservative that is why they were largely unaffected by the melt down at that time ..wonder what has changed over the past few years

[Dr.Dudd]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">cleaning house </div></div>I preducted the firing of Mr Clark when he ran and lost thr private sector chair.

[Dr.Dudd]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">yuh know back in the 90s they had a reputation for being very conservative that is why they were largely unaffected by the melt down at that time ..wonder what has changed over the past few years </div></div> They miscalculated the retail down tyrn this christmas. Most of the retailers were committed fr9m september. so they got caught

[evanovitch]

so anyone know if any troot to di rumas seh di billionaire a

ha some cash flow problems...u know , di returning conquering bank baller

[X]

Re: Scotiabank’s bad debt portfolio raises alarm

mi a ask fah a likkle schooling pon dis Scotia/Jamaica bad debt issue.. duh
30+% Interest on loans???!
Now in most countries (that iya now of), you'd have to have miserable credit score to be tied to such a high interest rate.
It seems to me that with the absence of a proper credit rating policy, the general approach is to treat the population as &quot;High risk&quot;
Now if that is the approch, then they should NOT be alwarmed by the bad debt portfolio.
If your credit rating means zilch.. why pay bac the high premium on an asset that has lost its value (or liklry to loos its value) in this economy?
Someone takes a loan to buy a car.. paying Scotia 33+%.. They loose them job, or job cut loom.. Why pay a dime more for the car if wheter you default or not, when u ready fi borrow again its the SAME high interest u gonna have to pay?
Maybe mi miss something, buy it doesnt seem there is much incentive to honor loans in Ja anyhow, so dem shouldnt be surprised by the high level of non performing loans.

[evanovitch]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: dmXks</div><div class="ubbcode-body">mi a ask fah a likkle schooling pon dis Scotia/Jamaica bad debt issue.. duh
30+% Interest on loans???!
Now in most countries (that iya now of), you'd have to have miserable credit score to be tied to such a high interest rate.
It seems to me that with the absence of a proper credit rating policy, the general approach is to treat the population as &quot;High risk&quot;
Now if that is the approch, then they should NOT be alwarmed by the bad debt portfolio.
If your credit rating means zilch.. why pay bac the high premium on an asset that has lost its value (or liklry to loos its value) in this economy?
Someone takes a loan to buy a car.. paying Scotia 33+%.. They loose them job, or job cut loom.. Why pay a dime more for the car if wheter you default or not, when u ready fi borrow again its the SAME high interest u gonna have to pay?
Maybe mi miss something, buy <span style="font-weight: bold">it doesnt seem there is much incentive to honor loans in Ja anyhow</span>, so dem shouldnt be surprised by the high level of non performing loans. </div></div>

sad commentary fi wat is now Ja given dat people use to faithfully line up to pay Courts dem hire-purchase loans...ah sah...yaad peeps use fi ha pride even unda trying circumstances...anyting fi avoid bad name a road, aka name cawl up a courthouse....sighhhhhh

[X]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: evanovitch</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: dmXks</div><div class="ubbcode-body">mi a ask fah a likkle schooling pon dis Scotia/Jamaica bad debt issue.. duh
30+% Interest on loans???!
Now in most countries (that iya now of), you'd have to have miserable credit score to be tied to such a high interest rate.
It seems to me that with the absence of a proper credit rating policy, the general approach is to treat the population as &quot;High risk&quot;
Now if that is the approch, then they should NOT be alwarmed by the bad debt portfolio.
If your credit rating means zilch.. why pay bac the high premium on an asset that has lost its value (or liklry to loos its value) in this economy?
Someone takes a loan to buy a car.. paying Scotia 33+%.. They loose them job, or job cut loom.. Why pay a dime more for the car if wheter you default or not, when u ready fi borrow again its the SAME high interest u gonna have to pay?
Maybe mi miss something, buy <span style="font-weight: bold">it doesnt seem there is much incentive to honor loans in Ja anyhow</span>, so dem shouldnt be surprised by the high level of non performing loans. </div></div>

sad commentary fi wat is now Ja given dat people use to faithfully line up to pay Courts dem hire-purchase loans...ah sah...yaad peeps use fi ha pride even unda trying circumstances...anyting fi avoid bad name a road, aka name cawl up a courthouse....sighhhhhh </div></div>

absolutlly.. poor people pay up loans faitfully.
The rich .. well we all remember how Mass Blinds for example (aldoe a mi hero dat) &quot;forgot&quot; that he had borrowed millions for his place deh outta Ochi.
Seems the educated has been using the system for some time now. With the increase travel and knowledge of how credit rating work in other countries, a guess the mass ketching onto the game, and dont give a flying... about &quot;good name&quot;
Dem find seh good name cant buy food.

[Dr.Dudd]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: dmXks</div><div class="ubbcode-body">mi a ask fah a likkle schooling pon dis Scotia/Jamaica bad debt issue.. duh
30+% Interest on loans???!
Now in most countries (that iya now of), you'd have to have miserable credit score to be tied to such a high interest rate.
It seems to me that with the absence of a proper credit rating policy, the general approach is to treat the population as &quot;High risk&quot;
Now if that is the approch, then they should NOT be alwarmed by the bad debt portfolio.
If your credit rating means zilch.. why pay bac the high premium on an asset that has lost its value (or liklry to loos its value) in this economy?
Someone takes a loan to buy a car.. paying Scotia 33+%.. They loose them job, or job cut loom.. Why pay a dime more for the car if wheter you default or not, when u ready fi borrow again its the SAME high interest u gonna have to pay?
Maybe mi miss something, buy it doesnt seem there is much incentive to honor loans in Ja anyhow, so dem shouldnt be surprised by the high level of non performing loans. </div></div>Well an incentive would be keeping posession of the car. Use car have some value,cause ther is always a market for car in Jamaica.

[evanovitch]

Re: Scotiabank’s bad debt portfolio raises alarm

yea an Butch neva tun ovah di GCT r was it di departure tax...and all now mi still a try find a follow up to Paul R from di PNP...dem loans fi build subdivision whe neva build but di yaadies were still being dunned fi next phase payment...it was a yaadie in Cayman who made the story go mainstream..came home to chek on him house an find dat not even road did cut..wen him refuse to pay anyting more, dem sued him....dat was gall indeed...neva did hear anyting else from dat story...except dat my guy is now lowkey in dem party runnings

[X]

Re: Scotiabank’s bad debt portfolio raises alarm

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dr.Dudd</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: dmXks</div><div class="ubbcode-body">mi a ask fah a likkle schooling pon dis Scotia/Jamaica bad debt issue.. duh
30+% Interest on loans???!
Now in most countries (that iya now of), you'd have to have miserable credit score to be tied to such a high interest rate.
It seems to me that with the absence of a proper credit rating policy, the general approach is to treat the population as &quot;High risk&quot;
Now if that is the approch, then they should NOT be alwarmed by the bad debt portfolio.
If your credit rating means zilch.. why pay bac the high premium on an asset that has lost its value (or liklry to loos its value) in this economy?
Someone takes a loan to buy a car.. paying Scotia 33+%.. They loose them job, or job cut loom.. Why pay a dime more for the car if wheter you default or not, when u ready fi borrow again its the SAME high interest u gonna have to pay?
Maybe mi miss something, buy it doesnt seem there is much incentive to honor loans in Ja anyhow, so dem shouldnt be surprised by the high level of non performing loans. </div></div>Well an incentive would be keeping posession of the car. Use car have some value,cause ther is always a market for car in Jamaica. </div></div>

thought of that... but naah
The only value a car really have in Ja is to run as Taxi.
as most know, the car losses value as soon as its driven off the lot.

If faced with no job, loosing job, rapidly depreciating value of motor cars, mi can see the logics behind the decision to stop service a 33+% loan on a motor car. Especially if the deal is a choice between paying for a car or paying for you mortgage on a stretched budget.

Kinda remind mi of a buddy that came to borrow some money yeeeears back to save his home from NHT foreclosure.
Mi asked him.. if him never get the notices that they were gonna foreclosed..
My boy said yes, but him had to take care of other bills.. &quot;like the water, light, him furniture and him car loan&quot;
Mi had to ask the bredren if him lick him head.. When him loose di house, what does it matter if him have water or light? When NHT gone wid di house, whey him put the furniture?? inna di Car??

A think Ja people might a find different priorities. Mek di dam car loan sink.. Keep dem house.
A wonder what NHT, JNBS and VM bad debt portfolios???