CREDIT CARDS GIVE SCOTIABANK BIG PROFIT

IN the midst of the crippling economic effects of Covid-19, Scotiabank Trinidad and Tobago is the latest financial institution to report increased profit. 

The profit was achieved in spite of a six per cent decline in loans. 

In fact, Scotiabank said its 26 per cent hike in after-tax profit was partly a result of increased credit card income. 

Ironically, in the early months of the pandemic, Finance Minister Colm Imbert had publicly announced that banks would ease credit card burdens on consumers.  

On April 27, 2020, Imbert told Parliament: “Credit cards now have reduced rates and increased credit limits.” 

But Scotiabank earned five per cent more from credit cards and other “core banking revenues.” 

The bank said that its after-tax profit for the first nine months of its fiscal year was $462 million, an increase of $96 million over the previous comparative period. 

The loan portfolio fell by $60 million, or six per cent, to $928 million, as a result of a decline in its loan portfolio. 

Republic Bank’s profit for the first three quarters of its fiscal year was $1.036 billion, a 33.3 per cent increase over the previous similar period. 

In most developed countries, commercial institutions have reported reduced profits during the pandemic, as a result of lower interest rates on loans and credit cards, and other benefits to consumers. 

In certain countries, including Britain, the authorities have mandated certain specific assistance be granted to deserving clients. 

The Bank of England, that country’s Central Bank, introduced measures to ensure that those who struggle to pay their debts are given “repayment holidays.” 

Banks were instructed to reduce their lending rates.
The Trinidad and Tobago Government has relied only upon persuading the banking community to aid people who can’t meet their bill payments. 

Local bank shareholders are smiling all the way to the … bank, of course.