Apr 2007 Financial News

NCBJ's profits rise 32 per cent to J$3.12 billion

Apr 27, 2007

The National Commercial Bank (NCBJ) recorded strong growth in their net profits for the six months ended March 31, driven mainly by its commercial banking operations. Net profit for the six months ended March 31st spiked by 32 per cent to $3.12 billion from $2.36 billion for the corresponding period of the previous year.

The second quarter, when compared to the first quarter of NCBJ's financial year, shows growth of eight per cent to $1.62 billion, and the second quarter grew even more impressively by 33 per cent against the similar period of 2006.

Strong net profit growth translated into an earnings per ordinary stock unit for the six month period was $1.27, compared to $0.96 for the same period last year. Return on average shareholders equity for the six months was 23.97 per cent, up from 21.52 per cent for the comparative prior year period.

Total revenue for the six months was $16.55 billion, representing an increase of $2.51 billion ,18 per cent, when compared $14.04 billion a year earlier. The banking segment contributed 68 per cent of the overall revenue of the Group, while the next largest segment was wealth management with 24 per cent.

The sustained focus of the banking segment in growing the loan portfolio resulted in an increase of $9.8 billion compared to March 2006. Loans and advances, net of provision, totalled $48.6 billion as at the end of March compared to $38.8 billion as at the end of March 2006. The aggregate amount of non-performing loans amounted to $1.7 billion and represented 3.49 per cent of the gross loans compared to 3.66% as at the end of September 2006 and 4 per cent as at the end of March 2006.

Aside from loans, NCBJ's revenue stream came from securities income which increased by 12 per cent to $924.9 million for the period under review. Net interest income grew by $426.4, or seven per cent, while net fee and commission income increased by $359.8 million or 26 per cent which was attributed to card and retail banking fees.

Net trading income, comprising foreign exchange gains, fixed income and equity trading increased by $562.4 million or 55 per cent.

Looking at the expense side, the cost of running the group was 15 per cent above the comparative prior year period. For the six-month period, non interest expense for the six-month period was $6.1 billion, a $788.4 million increase. NCB attributed this rise to a negotiated salary and allowance package for the current financial year.

NCBJ's asset base grew to $233.8 billion, or a 16 per cent increase, from the March 2006 figures. This increase was due to growth in investment securities, loans, and core customer deposits. Stockholder's equity for the six-month period ending March 2007 was $27.5 billion, a 21 per cent increase when compared to the March 2006 period.

Source:
Dennise Williams
The Jamaica Observer
Friday April 27, 2007

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