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JM | Aug 6, 2022

NCB continues to rebound, posting 86% rise in net profit

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Durrant Pate/Contributor

Regional financial conglomerate National Commercial Bank Financial Group continues its rebound, posting a commendable 86 per cent rise in net profits for the nine months ended June 2022.

After accounting for taxation of J$3.13 billion, down from J$6.53 billion in 2021, net profit for the period under review jumped to J$25.88 billion compared to J$13.91 billion for 2021. Net profit for the June third quarter amounted to J$10.60 billion, up from J$4.67 billion in 2021.

Net profit attributable to shareholders closed at J$18.64 billion for the nine months relative to J$9.91 billion in 2021. Net profit attributable to shareholders for the June quarter amounted to J$8.21 billion (2021: J$4.02 billion).

While chalking up total comprehensive loss year to date of J$11.64 billion, this was down from the 2021 booking of losses of J$14.97 billion. For the quarter, total comprehensive loss totaled J$7.51 billion compared to total comprehensive income J$5.37 billion in 2021.

Net interest income improved

Net interest income rose 18 per cent to total J$48.56 billion, relative to the corresponding period in 2021 when it amounted to J$41.29 billion. For the quarter, net interest income improved 14 per cent to close at J$16.18 billion (2021: J$14.19 billion).  

Interest income year to date rose 11 per cent year over year to J$67.58 billion compared to J$61.06 billion in 2021, while interest expense amounted to J$19.02 billion relative to J$19.76 billion for the corresponding period in 2021. Net fees and commission income amounted to J$19.15 billion, an increase of 14 per cent on 2021’s J$16.86 billion. 

‘Net Fees and Commission Income’ for the quarter amounted to J$6.19 billion (2021: J$5.44 billion). NCB Financial Group is reporting a gain on foreign currency and investment activities of J$7.02 billion, down from the J$12.29 billion booked in 2021. 

Dividend income increased by 33 per cent to a total of J$2.02 billion (2021: J$1.52 billion). Other operating income grew by a whopping 112 per cent to J$5.25 billion (2021: J$3.96 billion).

Credit impairment losses amounted to J$1.87 billion (2021: J$2.18 billion). As such, net results from banking and investment activities closed at J$80.14 billion (2021: J$73.75 billion).  Net results from banking and investment activities for the quarter amounted to J$26.73 billion (2021: J$27.16 billion).

Performance in insurance

Net underwriting income closed the period at J$90.42 billion, 11 per cent greater than the prior period. This is mainly due to a 11 per cent increase in insurance premium income to J$121.06 billion (2021: J$109.43 billion). The quarter’s net underwriting income amounted to J$26.87 billion (2021: J$25.69 billion).

Net results from insurance activities for the period increased 41 per cent to J$25.48 billion (2021: J$18.10 billion), this is primarily due to an increase in reinsurance on benefits and claims from J$4.87 billion to J$36.23 billion in 2022. 

Net result from insurance activities for the quarter amounted to J$9.55 billion (2021: J$4.94 billion). The group reports that the performance was, “mainly due to strong performance from our life and health insurance segment as a result of improved net premium income.”

NCB Group’s The Atrium in New Kingston.

Marginal rise in expenses

Total operating expenses for the period amounted to J$77.25 billion, an increase of eight per cent compared to the J$71.58 billion reported for the nine months ended June 30, 2021. Expenses for the quarter rose four per cent to close at J$25.52 billion compared to J$24.45 billion in 2021.

Of these expenses:

  • Staff costs increased nine per cent to J$37.52 billion relative to J$34.55 billion in 2021, primarily due to the annual increases.
  • Other operating expenses grew by 11 per cent to J$31.99 billion (2021: J$28.72 billion).
  • Finance cost increased to J$1.53 billion (2021: J$1.30 billion), while depreciation and amortisation fell 11 per cent to J$6.21 billion (2021: J$7.01 billion).

Share of profit of associates increased by 280 per cent to total J$642.74 million compared to J$168.95 million in 2021. For the quarter, operating profit increased 41 per cent to total J$10.77 billion (2021: J$7.65 billion).

‘Total Assets’ increased by seven per cent to J$2.02 trillion as at June 30, 2022 from J$1.89 trillion a year ago.  This increase stemmed mainly from the growth in ‘Investment Securities’ from J$677.63 billion in 2021 to J$724.84 billion, reflecting a J$47.21 billion increase.

Shareholder’s Equity as at June 30, 2022 stood at J$146.64 billion relative to J$156.43 billion a year ago. This resulted in a book value per share of J$59.45 (2021: J$63.41).

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