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 quarter ended 31 December 2009

PERFORMANCE HIGHLIGHTS

Quarter ended December 2009 compared with Quarter ended December 2008

• Net Profit of $2,771 million, grew by $388 million or 16.3%.
• Earnings per Stock Unit of $1.13 grew by $0.16 or 16.3%.
• Operating Revenue of $7,542 million, an increase of 19.6% or $1,234 million.
• Cost to Income Ratio of 50.6% vs. 51.8%.
• Risk-Based Capital Ratio of 15.3% vs. 13.0%.
• Total Assets of $313.4 billion, improved by 8.6% or J$24.8 billion.
• Net Loans of $87.9 billion, grew by 4.5% or J$ 3.8 billion.
• Investment Securities of $65.8 billion, grew by $8.6 billion over last year.
• Customer Deposits of $132.4 billion, increased by 3.4%.
• Return on Average Equity of 26.7% vs. 30.2%.
• Return on Average Assets was 3.5% vs 3.3%.

Quarter ended December 2009 compared with Quarter ended September 2009

• Net Profit of $2,771 million, declined by 4.7% or $137 million.
• Earnings per Stock Unit of $1.13 decreased by $0.06 or 4.7%.
• Operating Revenue increased by $208 million or 2.8%.
• Return on Average Equity was 26.7% vs 29.6%
• Return on Average Assets was 3.5% vs 3.7%.

SEGMENT PERFORMANCE

Commercial Banking
The commercial banking’s (Retail, Corporate and Treasury) operating results of $2,324 million for the quarter ended 31 December 2009 represent a decrease of $15 million from the December 2008 period. The results reflect growth in our investment securities portfolio which contributed to the 26.4% growth in interest income from securities and 12.1% growth in net fee and commission income.

Operating expenses for this segment increased by 7.9% which was primarily due to staff costs increasing by 16.2% due mainly to negotiated increases and loan loss provisions growing by 15.0%.

Loans and advances totalled $87.5 billion (net of provision for credit losses) as at 31 December 2009 grew by $3.8 billion over the loan portfolio as at 31 December 2008. Non-performing loans totalled $2.7 billion as at December 2009 and represented 3.0% of the gross loans compared to 2.5% as at 31 December 2008. Our provision coverage as at December 2009 was 142.2% compared to 149.3% at December 2008.

NCBJ remains the largest commercial bank when measured by profit, assets and branch network, and we believe that these advantages provide significant opportunities for continued
growth.

Wealth Management
Our wealth and asset management segment contributed operating profits of $894.6 million for the quarter ended 31 December 2009 and the result for this segment reflects a $547 million or 157.5% increase over the December 2008 quarter. NCB Capital Markets Limited (NCBCM).

Insurance
Our insurance segment contributed operating profits of $540.2 million for the quarter ended 31 December 2009, representing an increase of 39.8% or $154 million over the prior year’s first quarter results. NCB Insurance Company Limited (NCBIC), the major contributor to this segment achieved a net profit of $472.8 million, increasing by $158 million when compared to 31 December 2008.

Our pillars “Innovation, Expertise and Strength” continue to be the foundation on which we are building our financial fortress. Our organisation remains strong, both in profitability as well as prudential ratios.

We remain committed to and continue to pursue our strategic objectives and most importantly to keeping our organisation strong for all our stakeholders.

This strength is reflected in our capital position as follows:

CAPITAL
The Group’s Stockholders’ Equity of $42.0 billion increased by $10.2 billion or 32.0% when compared to 31 December 2008.

• The Risk-Based Capital Ratio for NCBJ was 15.3% which exceeds the minimum requirement of 10% stipulated by the Bank of Jamaica (31 December 2008 – 13.0%).

• The Capital to Risk Weighted Assets Ratio for NCBCM was 62.8% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (31 December 2008 – 64.4%).

• The Solvency Ratio for NCBIC was 25.5% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (31 December 2008 – 16.0%).

We remain committed to building the strength of our bank and after due consideration, the Board of Directors has not declared an interim dividend for the first quarter of the new financial year. We are of the opinion that, with the current uncertainties and challenges in the Jamaican economy consequent on the Jamaica Debt Exchange and the impending arrangements with the International Monetary Fund, the decision is in the best interest of the company. We will review our position and make the appropriate decision on dividends at the end of the next quarter by which time the full impact of the issues mentioned before will be better appreciated.

THE JAMAICA DEBT EXCHANGE (JDX)
As detailed in Note 5 of the accompanying notes to financial statements, NCBJ and its subsidiaries have accepted the Government of Jamaica's offer to voluntarily exchange its existing portfolio of locally issued Jamaican and United States dollars denominated Government of Jamaica Bonds.

While the reduction in the yields on local bond portfolio will impact the group’s gross revenues, we have modeled the effect on our business based on the new bonds that we have selected and the bank and its subsidiaries are forecast to produce significant levels of profitability while capital and liquidity will remain robust. In addition, we will be taking a number of steps to enhance other areas of revenue and improve efficiency.

AWARDS
We are extremely pleased to report to you our stakeholders that for the second consecutive year, NCBJ was awarded the “2009 Bank of the Year in Jamaica” by the Financial Times Banker Magazine. The recognition of being named Bank of the Year by the Financial Times, the world’s longest running international banking publication is a testament to our strong management and prudent risk approach.

We were also named Jamaica’s Employer of Choice at the Jamaica Employers Federation (JEF) Annual Awards Ceremony where we placed first in the Employer of Choice (Large Company Category – 500+ employees) and Highest Employee Satisfaction award categories.

We also received several important awards at the 2009 Jamaica Stock Exchange Best Practice Awards in December 2009. NCBCM won the Corporate Disclosure Award. NCBJ placed second in the Corporate Disclosure Award. NCBCM also took home the Best Website Award. NCBJ placed second in the PSOJ Corporate Governance Award.


COMMUNITY RELATIONS

In pursuit of our objective of Engaging in Nation Building, we committed over $8 million during the quarter in support of projects in the areas of Education, Sports Development, Youth Leadership and Entrepreneurship, with particular focus on community development. We supported numerous projects which included Christmas treats and community outreach programmes.

Education

We made donations towards the National Food & Nutrition Coordinating Committee Secondary School’s Competition. The competition was aimed at increasing nutrition awareness among secondary students. In addition, winners of the competition received book grants from the N.C.B. Foundation.

Community Development

With our continued focus on building communities in which we serve and the desire to strengthen our relationships within these communities, donations were made towards community development initiatives which included the Rural Family Support Organisation (RuFamSO). This organisation provides skills training to at-risk adolescent males residing in Clarendon.

In addition, we supported the Southside Christmas treats for surrounding communities of Downtown Kingston, Ward 5 of Bustamante Children’s Hospital and the Maxfield Park Children’s Home in partnership with the UWI Rotaract Club.

Youth Leadership & Entrepreneurism

We continued out 'Be the Change' camapign and five charities benefitted, namely the Usain Bolt foundation, Embrace Jamaica, Father's Incorporated, Baraage Scholarship and the Shaggy Foundation. This campaign is aimed at inspiring our youth to make positive changes not only in thier communities but in thier daily lives.

We wish to express our deep appreciation to our staff members for their coommitment and dedication to excellence in their work and for their enthusiastic involvement in the Group's philanthropic pursuits. We also wish to express out sincere gratitude to our customers for their loyalty, confidence and continued support and remind them that "We Make It Happen".