Senior Research Analyst at JN Group, Jahmar Brown, says Scotia Bank’s decision to increase its banking fees has been working.

The company more than doubled its profits for the first six months of the year.

The bank announced a wave of fee increases in 2022 due to what it said were increases in its operating costs, such as the cost of security.

Scotia, the second-largest commercial bank in Jamaica, recorded a 108% increase in net profits for the six months which ended April 30, 2023, compared to the same period last year.

The company’s net profits jumped from $3.6 billion last year to $7.6 billion.

Speaking on Taking Stock with Kalilah Reynolds, Brown explained that the growth was attributed mainly to an increase in Scotia’s loan portfolio.

Brown noted that the bank’s net interest income grew by 38% from $13 billion to $18.5 billion.

“This growth stemmed from strong growth in their insurance revenue, as well as higher fees and commission income, earned due to a significant increase in transactions,” he explained.

Scotia, like most local financial institutions, has increased its fees and interest rates since the COVID-19 pandemic to help keep up with the rising interest rates of the Bank of Jamaica.

Brown noted that despite an 11% increase in the company’s expenses, Scotia recorded a 40% growth in revenues from $19 billion to $26 billion.

As for the company’s stock price, Brown noted that despite its steep decline from its 2018 highs of $62, the stock has remained stable since then.

“Now, this decline would have started around the same time as Scotia’s move to close and diverse some of their branches and operations in the Caribbean,” he explained.

“This would have spooked some investors at the time however notwithstanding this Scotia has posted commendable results since then during the period. They have consistently paid dividends to shareholders which they will continue to do,” he added.

The stock ended trading last week at $34.91.