Net profits up by 31%
Financial services operator Sagicor Group Jamaica continued good fortune has extended into the first quarter of 2022 financial year.
Its unaudited financial statement for the three months ended March 2022 sees the Group generating total revenues of J$23.7 billion, a three per cent growth year over year.
Consolidated net profit attributable to shareholders came in at $3.82 billion, a notable 31 per cent increase on the $2.91 billion posted for the same period in the prior year.
Individual Insurance was a big winner for Sagicor Group Jamaica, contributing $2.19 billion to Group net profits for the quarter under review. Net premium income increased by $632.92 million year over year. Employee Benefits were lack lustre generating a profit of $1 billion, a three per cent decline against last year’s figure. Revenue for this line increased marginally (2%).
Group CEO Christopher Zacca has for some time drawn attention to the uptick in death and health claims, mainly due to the COVID pandemic. This would go some way in explaining the 16 per cent increase in Benefits expenses to a significant $4.95 billion.
Sagicor has made a concerted effort to close the gap on commercial bank leaders NCB and Scotiabank and will be heartened by its Commercial Banking line posting an increase in revenues by $481.09 million with profits of $389.13 million.
So what accounts for this creditable banking performance?
RISE IN CONSUMER SPENDING
The Group attributes it to strong performances in fee income and net investment income. In fact, fee income grew by a whopping 39 per cent ($1.41 billion) while net investment income of $2.72 billion was eight per cent higher than that recorded for the same period in 2021.
As the pandemic eases, Sagicor notes the rise in consumer spending.
Investment Banking got absolutely clobbered in the quarter, with this division seeing its net profit reduced by half. For the period under review, it posted a paltry $308.22 million whereas for the same period last year its profits were $651.67 million.
Why such a drastic fall?
“The segment was adversely impacted by unfavourable trading conditions and market volatility. Consequently, capital gains of $85.08 million were 79 per cent less than prior year. The segment continued to benefit from growth in its interest earning asset base which resulted in a 27 per cent or $305.99 million increase in net investment income,” read the Report to Shareholders.
Total assets grew by 9 per cent to $525.36 billion with market capitalization increasing by 11 per cent to $234.34 billion.
“Despite the challenges currently facing the world, the economic outlook for Jamaica remains optimistic. Sagicor Group Jamaica continues to monitor all of these macro variables in its management of the company and remains conservative in its outlook, “ wrote Group CEO Christopher Zacca.
