Scotiabank Flags Rising Mortgage Stress in the Caribbean — and Plans to Take Full Control in Jamaica

Scotiabank’s parent company, the Bank of Nova Scotia, disclosed during its third-quarter earnings call on 25 August that mortgage impairments in the Caribbean rose on a sequential basis in the three months to July, even as the Canadian banking group reported record earnings overall. The Caribbean’s provision for credit losses climbed to CDN$34 million in the quarter from CDN$31 million in the prior period. While that figure dipped slightly from the CDN$35 million recorded in the same quarter a year earlier, it stood out as one of only two regions globally where provisioning increased quarter-on-quarter. Every other segment including Canada, the United States, Mexico, and Chile reduced their provisions. Only Peru moved in the same direction as the Caribbean.

What the Numbers Mean

The bank’s chief risk officer described the movement as partly reflecting higher mortgage impairments in Chile and the Caribbean, noting that the bank continues to monitor pockets of weakness including elevated mortgage delinquencies. The Caribbean disclosure marks one of the first times since Hurricane Melissa struck the region last October that Scotiabank’s parent filings have drawn direct attention to the Caribbean mortgage portfolio. The connection is not explicit in the filings, but it is logical: a storm that caused total damage across Jamaica alone estimated at US$12.23 billion, equivalent to 56.7 per cent of the island’s 2024 GDP, put significant financial pressure on households across the region, and mortgage books that looked stable before October 2025 were testing different conditions in the months that followed.

Scotiabank in Jamaica indicated separately that its own delinquency for mortgages remains low. The Caribbean and international banking segment’s overall provision for credit loss ratio runs more than double the bank-wide ratio, a structural feature of the portfolio rather than an acute crisis signal, reflecting the higher-risk mix of Caribbean and Latin American loan books compared with the Canadian retail portfolio. The Caribbean generated CDN$740 million in revenue in the third quarter, up from CDN$700 million a year earlier, across operations spanning The Bahamas, Barbados, the Cayman Islands, the Dominican Republic, Guyana, Jamaica, Trinidad and Tobago, and the Turks and Caicos Islands.

The Jamaica Buyout

The earnings disclosure also contained a separate and significant development for Jamaica’s financial and property landscape. Scotiabank’s parent company announced plans to take full ownership of Scotia Group Jamaica, currently its subsidiary, by repurchasing the remaining shares held by public investors at J$61.50 each. The majority shareholder, Scotiabank Caribbean Holdings Limited, already controls 71.8 per cent of the group. The buyout, when complete, would remove Scotia Group Jamaica from the public market, concentrating ownership entirely within the Canadian banking group and ending the chapter of public shareholder participation in what is now Jamaica’s largest mortgage lender.

What This Means for Jamaica’s Mortgage Market

Scotiabank’s position in Jamaica’s mortgage market carries direct implications for how easily Jamaicans can finance a home. As the island’s largest mortgage lender, the bank’s lending appetite, its pricing decisions, and its risk tolerance for the Jamaican mortgage book are felt across the property market. A parent institution that is signalling awareness of Caribbean mortgage stress while simultaneously moving to consolidate full ownership of its Jamaican subsidiary is not sending contradictory signals. It is demonstrating confidence in the long-term value of the franchise while managing the near-term risk associated with post-hurricane household financial pressure more carefully than it did before October 2025. For buyers, agents, and developers watching the lending environment, those signals are worth reading together rather than separately.

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