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The Board of Directors is pleased to release the following un-audited results for National Commercial Bank Jamaica Limited (NCBJ) and its subsidiaries for the six months ended 31 March 2009.
PERFORMANCE HIGHLIGHTS
Half Year ended March 2009 compared with Half Year ended March 2008
- Net Profit of $4,626 million, increased by $120 million or 3%.
- Earnings per Stock Unit of $1.88 grew by $0.05 or 3% .
- Operating Revenue of $12,959 million, increased by 8%
- Cost to Income Ratio of 51.7% vs. 50.8%.
- Risk-Based Capital Ratio of 13.16% vs. 15.53%.
- Net Loans of $88.1 billion, grew by 40%.
- Investment Securities of $151.5 billion, decreased by $509 million.
- Customer Deposits of $129.9 billion, increased by 8%.
- Return on Average Equity was 28.51% vs. 29.74%.
- Return on Average Assets was 3.12% vs. 3.44%.
Quarter ended March 2009 compared with Quarter ended March 2008
- Net Profit of $2,243 million, declined by 15% or $404 million.
- Earnings per Stock Unit decreased by $0.16 or 15%.
- Operating Revenue grew by $293 million or 5%.
- Return on Average Equity was 27.41% vs. 34.02%.
- Return on Average Assets was 3.03% vs. 4.01%.
- The results for the prior period included a one-off gain of $530 million. Excluding this gain,
- the growth in Net Profit over March 2008 was 6%.
Quarter ended March 2009 compared with Quarter ended December 2008
- Net Profit declined by 6% or $140 million.
- Earnings per Stock Unit of $0.91 decreased by $0.06 or 6%.
- Operating Revenue increased by $344 million or 5%.
- Return on Average Equity was 27.41% vs. 30.18%.
- Return on Average Assets was 3.03% vs. 3.29%.
SEGMENT PERFORMANCE
Banking
The Banking segment’s results for the six months ended March 2009 reflect an increase of $54 million over the prior March 2008 period. The consistent results were driven mainly by growth in the Corporate and Retail loan portfolios, securities income and fee and commission income:
- interest income from loans increased by 36% due to the growth in the loan portfolio.
- interest income from securities increased by 14%.
- net fee & commission income grew by 6%.
Loans and advances totalled $88.1 billion (net of provision for credit losses) as at 31 March 2009 growing by J$25.4 billion over the balances as at 31 March 2008. Our net loans to total assets ratio, one of our key strategic measures, has improved from 23.29% at March 2008 to 29.12% at March 2009. Non-performing loans totalled $2.3 billion as at March 2009 which represented 2.56% of the gross loans compared to 2.48% as at 31 March 2008. Our provision coverage as at March 2009 was 148.8% compared to 153.0% at March 2008.
For the six months ended 31 March 2009, provision for credit losses totalled $477 million compared with $214 million for the period ended 31 March 2008, both as a result of the portfolio growth as well as the impact of the challenging economic environment on our customers. We have responded to the challenges by implementing measures to mitigate the impact on our loan portfolio. We have strengthened our loan origination processes and enhanced our delinquency management. We continue to proactively manage this core business activity to ensure that, as far as is possible, we are mitigating the impact of the economic environment on our loan quality.
NCBJ remains the largest commercial bank when measured by profit, assets and branch network, and we believe these advantages provide significant opportunities for continued growth.
Wealth Management
Our wealth and asset management segment contributed operating profits of $827 million for the six months ended March 2009. NCB Capital Markets Limited (NCBCM) the main contributor to this segment provided 86% of the operating profits. The result for this segment for the six months ended 31 March 2009 reflect a 37% reduction from the 2008 period due mainly to a decline in the results of NCBCM. The current economic environment,
characterised by thinning margins, mark to market losses on trading securities and inactivity in the global bond market, have negatively impacted the operations of NCBCM.
Insurance
Our insurance segment contributed operating profits of $822 million for the six months ended March 2009, representing an increase of $574 million over the corresponding period of the prior year. NCB Insurance Company Limited (NCBIC), the major contributor to this segment achieved a net profit of $724 million, increasing by $496 million when compared to March 2008. A year ago, in our March 2008 report, we highlighted the changes made with our restructuring of NCBIC. These changes have strengthened the company, resulting in a significant improvement in its performance.
Overall, our segment results reflect the careful and strategic management of customer relationships and needs, expert management of interest rate spreads and liquidity and proactive and effective management of our risks and costs.
We remain committed to and continue to pursue our strategic objectives and most importantly to keeping our organisation strong for all our stakeholders.
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