Monday 21 September, 2020

NCB eyes Guyana

NCB Financial Group CEO, Patrick Hylton says the company  is focused on finding opportunities during the current COVID-19 crisis.

NCB Financial Group CEO, Patrick Hylton says the company is focused on finding opportunities during the current COVID-19 crisis.

The NCB Financial Group has its sights set on Guyana, the eastern CARICOM market, where oil was recently discovered. 

"We would like to participate in the development of that economy in providing financing for companies who are investing," said NCB Group CEO Patrick Hylton.

Hylton, who was addressing investors on Wednesday, July 5, said NCB Capital markets would be the primary vehicle to enter Guyana.

He said the process of completing the application and seeking approvals is currently underway.

Hylton said the company is focused on finding opportunities during the current COVID-19 crisis.

“We will continue to learn and adapt as things continue to evolve,” he stated.

At the same time, NCB Financial Group indicated that one-off gains from 2019 were the cause of a 29 per cent dip in this year’s earnings.

For the nine months ended June 30, 2020, the group reported net profit of $20.3 billion.

Net profit attributable to stockholders of the parent was $14.8 billion, a 29 per cent or $6.0 billion decline from the prior year.

The prior year’s results included one off-gains of $3.3 billion from the disposal of an interest in an associate company and $2.3 billion from the revaluation of interest in Guardian Holdings Limited (GHL).

Excluding these gains, net profit attributable to stockholders would have decreased $350 million or two per cent from the prior year, it was noted.

The impact primarily resulted in reduced securities trading activity, coupled with the depreciation of the Jamaican currency, resulting in reduced gains on foreign currency and investment activities.

It has also caused increased credit impairment provisions and the waiver of certain digital and self-service channel user fees.

Operating profit for the nine months increased by 28 per cent or $4.9 billion over the prior year.

The net result from banking and investment activities, $58.3 billion, represented growth of 12 per cent or $6.2 billion.

There was also a reduction in income from fees by National Commercial Bank Jamaica Limited, which was mainly due to its drive to have customers use digital channels along with the temporary waiver of some transaction fees to assist customers during the COVID-19 pandemic.

The reduction in gain on foreign currency and investment activities of 72 per cent or $6.3 billion partially offset those improvements in revenues.

Credit impairment losses increased by $2.0 billion or 55 per cent due to expected credit losses from the impact of COVID-19.

The net result from insurance activities totalled $23.4 billion, an increase of $16.1 billion due to the consolidation of GHL.

The group said that as a result of the slowdown in the economy, it has offered moratoriums to customers.

It has also introduced new interest free short-term loans/facilities and is encouraging customers requiring additional assistance to avail of a Pay Day Loan facility.

“We continue to closely monitor the group’s non-performing loans, which totalled $22.8 billion as at June 30, 2020, an increase of $3.8 billion over the prior year,” NCB stated.

Customer deposits, the group’s largest source of funding, totalled $545.7 billion, an increase of $36.7 billion or seven per cent over the prior year.

Total assets increased by $121.8 billion or eight per cent to $1.7 trillion, mainly due to expansion of the company’s investment securities and loan portfolios.

Customer deposits, repurchase agreements and investment contract liabilities primarily funded the growth.

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