Apr 2016 Financial News

NCB profit hits J$6 billion at the six-month mark

Apr 29, 2016

The commercial banking portfolio of the National Commercial Bank Jamaica Limited (NCBJ) led profit for the finance house for the six months ended March 31, 2016 which totalled J$6 billion for all segments.

Overall, for the period ended March 31, 2016 net profit saw an increase of $594 million to the $6-billion mark or 11 per cent compared with the six months ended March 31, 2015.

For the last quarter, the three months ended March 31, 2016 net profit was $3.6 billion,an increase of 10.2 per cent, or $332 million.

Comments attached to the results state that the commercial banking activities, comprising the Retail & SME, Payments Services, Corporate Banking, and Treasury & Correspondent Banking segments, produced combined operating profits of $4.6 billion for the six months — an increase of 6.9 per cent, or $299 million, when compared to the prior year.

The group indicated that within the portfolio the Treasury & Correspondent banking segment was the largest contributor to operating profit for the period, contributing 28.4 per cent to the total.

The bank’s directors said that a continued focus on strategic imperatives has led to improved performance for the first half of the financial year.

Earnings per stock unit for the period was $2.44, increased by $0.25 cents for the group and its subsidiaries.

Total assets of $555.6 billion grew by 13.7 per cent, or $67.0 billion, while return on average total assets remained flat at 2.2 per cent.

Net loans of $172.7 billion, grew by $14.8 billion, or 9.4 per cent, while customer deposits of $251.0 billion increased by $41.0 billion, or 19.5 per cent.

For the six-month period net interest income increased by 9.4 per cent or $1.2 billion, due to growth in the net loans and investment securities portfolios and a reduction in interest expenses driven by the decline in the repurchase agreements portfolio.

For the group, which also has life insurance and general insurance units, premium income grew by $687 million, or 18.5 per cent with higher levels of life insurance (individual and group) and annuity contracts.

Additionally, net fee and commission income increased by 7.9 per cent, or $384 million, said to be mainly due to credit-related fees from the growth in the loan portfolio and corporate finance and unit trust commissions arising from growth in those product lines.

For the group, operating expenses increased by 10.8 per cent, or $1.8 billion, over the six months.

In the commercial banking segment, loans and advances, which totalled $172.7 billion (net of provision for credit losses) as at March 31, 2016, grew by 9.4 per cent, or $14.8 billion, compared to the loan portfolio as at March 31, 2015.

This was driven by growth in all segments’ portfolios, led by an 11.5 per cent increase in the retail banking portfolio it was noted.

Non-performing loans for the group totalled $8.5 billion as at March 31 compared to $8.8 billion the year before and represented 4.8 per cent of the gross loans compared to 5.4 per cent as at March 31, 2015.

Customer deposits were $251.0 billion, up 19.5 per cent or $41.0 billion over the prior year which was driven, the group said, by growth in savings, current accounts and fixed deposit portfolios, which increased by 20.5 per cent, 25.5 per cent and 11.8 per cent respectively, over the prior year.

Directors commented, “The results are supported by strong growth in our core business portfolios. We anticipate a steady performance for the second half of the financial year as we pursue our strategic objectives and implement various initiatives under our digitisation agenda”.

The group has been investing in transforming operations through digital initiatives ranging from systems through software to service offered to the client public.

 

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter 
Jamaica Observer
Friday April 29, 2016

http://www.jamaicaobserver.com/business/NCB-profit-hits-J-6-billion-at-the-six-month-mark_59341