Record profit for NCB: more than $10 billion in half year
The NCB Financial Group has reported $11 billion profit for the six months ended March 2018, making it the first company on the Jamaica Stock Exchange (JSE) to surpass the $10 billion mark during the half year.
Only two companies on the JSE have annual earnings in excess of this number, stated the NCB Financial Group Deputy CEO, Dennis Cohen.
Speaking at an investors’ briefing in Kingston on Friday, Cohen said the results are underpinned by a 22 per cent growth in revenues and a $1.5 billion gain on NCB’s investment in Bermuda-based Clarien Group.
For the review period, operating income grew by $6.6 billion or 23 per cent to $35.7 billion over the prior year, which resulted of improvements in gains from foreign currency and investment activities which grew by $3.5 billion or 97 per cent.
The performance is in the context of improving domestic macro financial conditions, a stable exchange rate and declining interest rates, together with buoyant liquidity, the company said.
Net-free and commission income grew by 11 per cent or $749 million, mainly as a result of higher transaction volumes for point-of-sale and e-commerce channels, increased investment banking and pension fee income and the consolidation of Clarien Group.
“Our investment banking and wealth management and pension management business continue to perform well, demonstrating the increasing importance of our non-banking business, as interest rates decline, we continue to focus on managing our margins and growing our assets,” said Cohen.
The Deputy CEO also gave an account of the performance of the various business units, noting that the wealth management segment of the business is the main contributor to the group’s operating profit, recording $4 billion or an increase of six per cent.
Treasury and correspondent banking, which has historically held the number one spot, is now second, despite increasing by 10 per cent during the year.
Cohen also said the investment in the company’s payment services segment is now bearing fruit.
As for the quarterly performance, NCB Financial Group reported a marginal increase of nine per cent. For the three months ended March 31, 2018, NCB reported $6.4 billion up from $5.8 billion in the comparative period of 2017.
Operating income for the quarter was $19 billion, up from $14.9 billion in the corresponding quarter of 2017.
Commenting on the reduced margins in the March quarter, Cohen said the interest margins are declining, with some of NCB’s business segments heavily relying on net interest income.
He, however, was not too concerned with the margins, noting that the group was heavily diversified.
“The organisation is fairly well hedged in terms of its overall performance because there are units that will be able to benefit from whatever market conditions exist at any point in time,” Cohen said.