NCB buy rated for growth

NCB Financial Group’s shares look likely to rise.

NCB Financial Group (NCBFG) reported net profit of $9.5 billion for the six months ended March 31, 2017, an increase of 58 percent over the prior year, with profit for the quarter to March, ended with a 63 percent increase to $5.9 billion, up from $3.59 billion in 2016.
Operating income amounted to $29.2 billion, an improvement of $3.8 billion or 15 percent over the similar period in 2016. The increase the Group said “was driven gains realised on investment activities increasing by $1.8 billion or 96 percent mainly due to improved investor confidence as a result of the improved macroeconomic fundamentals of Jamaica. Net fee & commission income increasing by $1.7 billion or 33 percent, primarily due to credit related fees from volume growth in loan product sales, point of sale and e-commerce commissions, coupled with corporate finance and unit trust fees.”
Loans the main driver of profits, increased by $34.6 billion or a strong 20 percent to $207.3 billion at the end of March over a year ago. The increase was driven by a 22 percent in Retail Banking and 17 percent increase in Corporate Banking portfolio, Patrick Hylton, the Managing director, advised investors in a report accompanying the results.
Operating profit rose about the similar period in 2016 by 150 percent for Retail & SME divisio0n, 16 percent for payment services, 77 percent for Corporate Banking. Treasury and Correspondent Banking enjoyed a 46 percent rise, Wealth, Asset Investment Banking operating profit jumped 67 percent, Life Insurance and Pension Fund Management rose 50 percent general insurance grew 42 percent and other 45 percent
The Group approved an interim dividend of 60 cents per ordinary stock unit at its board of directors meeting on April 27. The dividend will result in a total payment of $1.48 billion. Earnings per share ended at 42.39 for the March quarter and $3.84 for the six months and seems on target to exceed IC target of $8 for the full year to September.
In trading on the Jamaica Stock Exchange, the group’s stock traded at $63.75 and at TT$3.99 on the Trinidad Stock Market.

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