Apr 2008 Financial News

NCBJ Releases Half Year Results

Apr 30, 2008

National Commercial Bank Jamaica Limited
Results for the Half Year Ended March 31, 2008

All figures quoted in Jamaica Dollars unless otherwise stated

Earnings Per Share
For the Half Year Ended March 31, 2008, National Commercial Bank Jamaica Limited (NCBJ) reported Earnings Per Share (EPS) of $1.83, up a significant 44.1 per cent or 56 cents on the comparable EPS of $1.27 in fiscal 2007. This growth however included a one off gain of $517 million. Excluding this gain, the Bank’s EPS was still up a commendable 27.6 per cent from $1.27 (HY07) to $1.62 (HY08).

Financial Highlights
• Total Interest Income, up 13.1 per cent or $1.6 billion to $13.9 billion. Interest Income from Loans increased 24.7 per cent due to continued growth in the loan portfolio
• Net Interest Income, up 17.5 per cent or $1.1 billion to $7.4 billion
• Net Fee and Commission Income, up 25.2 per cent or $444.1 million to $2.2 billion
• Operating Revenue, up 18.4 per cent or $1.9 billion to $12.0 billion
• Operating Expenses, up 2.9 per cent or $175.8 million to $6.3 billion
• Operating Profit, up an outstanding 42.3 per cent or $1.7 billion to $5.7 billion
• Net Profit, up 44.5 per cent or $1.4 billion to $4.5 billion. Excluding the one-off gain, Net Profit was up 27.9 per cent from $3.1 billion to $4.0 billion.

The total assets of the Group ended the period at $269.3 billion representing an increase of $35.5 billion or 15.2 per cent on HY07. Return on Equity and Return on Assets was 29.7 per cent and 3.4 per cent respectively.

Dividends
The Board has declared an Interim Dividend of $0.42 per share payable on May 22, 2008 for stockholders on record as at May 9, 2008

Recommendation
NCBJ last closed at a price of TT$2.09 on the local exchange. We are maintaining our forecasted EPS of TT$0.28 at this time and at the current price and this forecast, NCBJ is trading at an attractive price to earnings multiple of 7.5 times. Additionally using a multiple of 9 times and the forecasted EPS of TT$0.28, NCBJ has an expected return of approximately 21 per cent or a target price of TT$2.52. Thus we continue to recommend a BUY on this share.


Nancy Chen
WISE Equity Research Team