At $28.6 billion, NCB records biggest profit in its history
At a staggering $28.6 billion, financial conglomerate, NCB Group said on Thursday that it had recorded the biggest profit in its history.
The announced net profit is for the financial year ending September 30, 2018, an improvement on the $19 billion it recorded in the comparative year.
“We attained the highest profit in our history, which was supported by strong performances across seven business segments,” NCB said in its financial statements posted on the Jamaica Stock Exchange on Thursday.
NCB’s 50.1 per cent majority stake in Bermuda-based Clarien Group Limited (Clarien); NCB Capital Markets’ involvement in 30 capital markets and structured deals across the region for close to US$800 million – were listed as key factors behind the company’s significant earnings.
The group, led by President and CEO Patrick Hylton, noted that performance demonstrates a dedication to strategy, risk management, processes, delivery of consistent results and continuous improvement,” NCB said.
Concurrently, fourth-quarter profit exceeded $7 billion which was topped only by the first quarter’s results that had included gains (negative goodwill) of $4.4 billion related to the acquisition of Clarien Group.
Also during that quarter, NCB divested a portion of its investment in JMMB Group Limited, reducing its stake to 20.01% from 26.30 per cent, resulting in a gain of $837 million.
The bank also revealed that impairment losses of $284 million were also recorded in the fourth quarter, related entirely to debt securities classified as available-for-sale and loans and receivables. It said operating income for the financial year grew by 29 per cent or $17.1 billion, to $76.5 billion.
According to the financials, the bank’s growth in income was primarily driven by gains from foreign currency and investment activities which increased by 102 per cent or $7.9 billion.
“This resulted from an improving macro-economic environment coupled with high levels of JMD liquidity and declining interest rates generating a high demand for debt securities,” the bank said.
NCB also disclosed that operating expenses grew by $12.0 billion or three per cent to $50.4 billion, although it managed to maintain a 63.2 per cent cost to income ratio.
“These increases were primarily due to our investments in digitisation and the implementation of the agile methodology across the organisation. These initiatives along with our cost optimisation strategies will result in the lowering of the cost to serve our customers and provide a better experience through our various channels,” it added.