Nov 2010 Financial News

PCFS net profit up 14% in Sep Q

Nov 10, 2010

Pan Caribbean Financial Services (PCFS) and its subsidiaries saw its net profit rise from year-earlier levels by 14 per cent, or $65 million during the three months ended September 30, 2010.

The increase in profit was largely due to a $37 million increase in net interest income and a $67 million increase in net trading income.

Interest income from loans declined 21 per cent while interest income from securities declined 26 per cent, but interest expenses dropped more precipitously — by 40 per cent — to $889 million during the review period, down from $1.48 billion during the comparative period in 2009.

Other operating inccome declined by 70 per cent on the other hand.

Total operating income increased 5.3 per cent to $974.4 million.

Operating expenses also fell 11 per cent over prior year's quarter to $371 million, as PCFS' provision for credit losses was reduced by 58 per cent from year-earlier levels to $32 million.

Even though there was a reduction in the provision for credit losses, PCFS' non-performing loans and leases increased from $232 million, or 2.6 per cent of the total loan portfolio at the end of December 2009 to $411 million, or 4.6 per cent of the portfolio as at September 30, 2010.

In a statement to shareholders, endorsed by PCFS president and CEO, Donovan Perkins and PCFS chairman, Ricard Byles, the financial group emphasised the need to improve credit quality.

"Close monitoring of the portfolio and proactive measures are being taken to contain and improve the situation to ensure that asset quality ratios are restored to acceptable levels," the statement accompanying the financial statements said.

Team member costs increased six per cent to $196 million for the quarter as a result of annual salary adjustments. Occupancy costs also continue to grow, moving to $25 million versus the $22 million, recorded in last year's quarter.

Earnings per stock unit increased to $0.83 versus $0.71. The institution also completed the redemption of $651 million in preference shares in the quarter.


Source:
Jamaica Observer
Wednesday November 10, 2010

http://www.jamaicaobserver.com/business/PCFS-net-profit-up-14--in-Sep-Q_8133443