Dropped income & increased cost hit NCB

A fall of $2.3 billion in foreign exchange and investment gains at NCB Financial Group (NCB) was the major factor for a fall in profit in 2019 March quarter to $5 billion from $6.4 billion in the similar period in 2018.
Revenues decline, was not the only area affecting the group’s second quarter performance as a $600 million jump in credit impairment losses and increased depreciation and amortization charge of $430 million, added even more pressure to the results.
For the six months to March, the group reports a net profit of $12.4 billion, down from $13.96 billion in 2018. The 2018 results include a gain of $4.4 billion related to the acquisition of Bermuda based Clarien Group. The amount is partially negated by a gain of $3.3 billion arising from disposal of an associated company JMMB Group, with the amount reflected in the 2019 results. Excluding the one-off transactions the results would have been $9.2 billion for the current period compared to $9.4 billion for the prior year. According to NCB, “we have made significant investments to improve our card system infrastructure, as well as to upgrade our ABM network and core banking system, to enhance and improve overall customer experience.”
Segment results were mostly positive with Retail and SME Banking climbing a healthy 25 percent, Payment Services up 20 percent, Corporate Banking jumping a huge 60 percent but Treasury and Corresponding banking was modestly down by just $12 million. Wealth & Investment banking slipped 18 percent but Life Insurance and Pensions jumped 41 percent while General Insurance leaped 155 percent and other fell 152 percent, for a loss $124 million.
The Group’s most critical area of loans and advances, grew 15 percent over 2018, to end at $384 billion, net of provision for credit losses. GHrowth in loans helped to drive net interest income up by 21 percent from $8.36 billion to $10.15 billion in the second quarter, over the similar period in 2018 and for the six months, a rise of 26 percent to $20 million from $15.9 billion. Non-performing loans amounted to $17.7 billion as at March 2019, up from $15 billion at March 2018 and represents 4.5 percent of the gross loans.
Earnings per share $2.04 for the second quarter and $5.07 for the half year. The group declared a dividend of 90 cents payable on May 27. NCB closed trading at $145 on Thursday on the Jamaica Stock Exchange and at TT$8.25 or J$165 on the Trinidad and Tobago Stock Exchange.