NCB bullish about next year after record profits
NCB Group Deputy CEO, Dennis Cohen (left), and CEO, Patrick Hylton.
National Commercial Bank (NCB) Financial Group’s CEO, Patrick Hylton, has expressed confidence that come next financial year, the company will improve the record profit of $19.1 billion it recorded this year.
“We are on a journey of continuous improvement, and so each year we seek to raise the bar in terms of our performance, and we’ve been able to successfully continue in terms of this year,” Hylton told an investors’ briefing at the NCB Wellness Centre in Kingston on Friday.
The group’s profit of $19.1 billion for the year ended September 30, 2017 is an increase of 32 per cent over the previous year.
Group Chief Financial Officer, Dennis Cohen, said the overarching performance is driven by NCB’s core banking and other financial services.
The group accomplished the record net profit performance for the financial year, representing an increase of $4.7 billion over the prior year, along with strong growth in loans and deposits.
Customer deposits represented over 51 per cent of the group’s funding base, and closed the financial year at $288.5 billion, a $14.5 billion increase over the prior year.
Meanwhile, loans and advances, net of provision for credit losses, increased by $29.6 billion or 16 per cent to $218.6 billion as at September 30, 2017.
Operating income of $59.5 billion grew by 15 per cent or $7.9 billion over the prior year. The growth was as a result of: gains on foreign currency and investment activities improving by $3.0 billion or 63 per cent, driven by gains from the sale of debt securities.
Cohen, who is also the Deputy CEO, said there has been a significant increase in operating expenses, which is in line with the group’s investments in technology to enhance its digital capabilities.
“It is clear to us that it is sustainable, and we also expect improvements because we are yet to realise the significant investments we are making today,” Cohen told investors on Friday.
NCB said it continues to invest in ways to further improve its operating model, enable its business segments to capitalise on growth opportunities and to better serve its customers, including introducing innovative digital options, resulting in a spend of $38.3 billion for the year ended September 30, 2017, an increase of 14 per cent or $4.8 billion over the prior year.
The company also plans to launch its mobile banking app in 2018.
Expenses were also impacted by negotiated increases in salaries, wages, allowances and benefits.
“These investments will initially impact resourcing and infrastructure costs in the short-term, but are expected to improve efficiency and customer experience over the medium to long-term,” Hylton said.
Hylton also said the close of the financial year marked the first year of NCB’s new strategy – ‘NCB 2.0: faster, simpler, stronger’.
“The performance, I think, validates the fact that the strategy is appropriate in the context of our circumstances,” he said.
NCB is focused on three strategies: building a digital experience, accelerating regional expansion and reinventing its core business.