Sagicor Group not closing any branches in spite of big COVID-19 hit


Sagicor Group not closing any branches in spite of big COVID-19 hit

Banking arm bears brunt of $700-m hit

Observer business writer

Wednesday, May 20, 2020

Print this page Email A Friend!

Sagicor Group will not be closing any of its branches like some of its competitors, in spite of taking a $700-million hit in the March quarter due to the COVID-19 pandemic.

This announcement follows news of the temporary closure of some branches of Scotiabank and National Commercial Bank.

Scotiabank last month temporarily closed eight branches across the island in light of COVID-19, while NCB, having temporarily closed its St Catherine branches last month, disclosed last week that it will be closing its Half Moon, Annotto Bay and Chapelton locations by July 2020.

This is being done as part of NCB's digital transformation initiative.

In making the announcement of not closing any branch, Sagicor President Chris Zacca boasted that in spite of the adverse effect of COVID-19 Sagicor performed well in Q1 of 2020. He was responding to questions from the Jamaica Observer at Sagicor's Quarterly Media Briefing on Monday.

As regards the branch network, Zacca declared, “we don't plan to close any branches, but our branch network is less pervasive than some of our competitors…I am extremely proud of my team for their tremendous performance in keeping our core businesses functional and vibrant while successfully navigating the sudden and significant changes to our operations due to the COVID-19 pandemic,”

He pointed to successes in migrating many customers from the traditional means of banking to the digital platform.


He said the banking arm took most of the $700-million COVID-19 hit. Sagicor Bank saw a reduction in net profits reporting $0.13 billion for the quarter, primarily due to unbudgeted and unrealised IFRS 9 expected credit losses. This was due to the downgrading of some of its loans because of COVID-19's effect on the economy.

Fee-based income through payment channels however increased by 12 per cent over the prior year to $1.06 billion.

The Sagicor Group president noted that “the payment channels are definitely a key area of focus for the bank as we continue to strengthen our online and digital platforms to facilitate less face-to-face transactions, especially in this COVID-19 environment”.

In conforming with IFRS requirements, Sagicor bank increased its loan loss provisions. Zacca expressed optimism that most of these provisions would be reversed later in the year with the opening up of the Jamaican economy and the subsequent anticipated recovery.

For the quarter ending March 31, Sagicor generated net profit attributable to stockholders of $1.88 billion, which represented a 30 per cent decrease when compared to the prior year. However, the Sagicor president explained, “if we add back the impairments to our tourism-related investments and unrealised mark-to-market losses on equities and unit trust investments, adjusted net profit for the quarter would have been $3.3 billion – a 22 per cent increase over Q1 2019”.

Additionally, total revenue before unrealised capital losses increased by 15 per cent over the prior year, or $3.05 billion.


Sagicor's core insurance businesses have seen strong new business and portfolio growth, which resulted in a 24 per cent increase in net premium income and a 34 per cent increase in fee income when compared to the corresponding period last year. The group's operating cash flow has also increased by $4.40 billion and its cash position has improved by $6.10 billion.

“These are all positive indicators, and we remain optimistic even as we put plans in place to weather this COVID-19 storm,” Zacca said. Sagicor's business lines performances in Q1 were as follows:

•Individual Life Insurance Division posted net profits of $1.27 billion, 112 per cent better than 2019. Net premium income of $6.93 billion was 12 per cent higher than the comparative 2019 period. This was driven by higher new sales (API) in 2020 for both Jamaica and Cayman, resulting in the in-force block of policies growing by 7 per cent to almost 600,000 policies.

• The Employee Benefits Division produced profits of $1.09 billion, a 13 per cent decrease over the prior year. New sales however increased, with annualised new premium income increasing by 42 per cent over 2019.

• Sagicor Investments showed strong profitability during the period, contributing $0.53 billion (excluding the share of AGIC earnings) to the group, which is 43 per cent higher than the prior year.

Despite the decrease in net profits as a group Sagicor remained strong and solvent, with consolidated cash generated from operating activities being $10.57 billion when compared to $6.16 billion in 2019. The liquidity of the group also remained strong, with cash and cash equivalents at the end of March 2020 being $27.44 billion (2019: $21.34 billion). The group has maintained its strong capital position and continues to exceed regulatory capital requirements across all entities.

Zacca promised that Sagicor will continue to implement several measures to be proactive in order to continue providing top-notch service to clients and keep the business lines strong, all while ensuring the safety and overall well-being of all stakeholders.

Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at




1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed:

6. If readers wish to report offensive comments, suggest a correction or share a story then please email:

7. Lastly, read our Terms and Conditions and Privacy Policy

comments powered by Disqus



Today's Cartoon

Click image to view full size editorial cartoon