NCB Profit grows set for $4.80 EPS for year

National Commercial Bank reported impressive results for the nine months ended June 2014 compared with the nine months ended June last year. Net profit reported is $8.8 billion, an increase of 29 percent, or $2 billion for the nine months. For the latest quarter, net profit of $2.9 billion was made, an increase of 29 percent, from $2.27 billion in June 2013.
Earnings per stock unit amounted $3.56 and is set to get to $4.80 per share for the full year. Gross revenues of $42 billion increased 17 percent, or $6 billion from $36 billion generated in 2013.
As impressive as the results may appear two things have to be borne in mind, one is that in 2013 a large charge was incurred flowing from government of Jamaica debt swap, and the segment accounts show a mixed picture with just four out of the seven segments contributed to the improvement, as the others, recorded declines for the nine months. On the plus, was a $550 million reduction in loan loss provision, from $1.78 billion to $1.24 billion, with this year’s June quarter being $357 million or roughly half of what it was in 2013.
Staff cost a bit item, is up a bit, year over year, but part of that was due to the general insurance company coming into the group, for a part of the year. A more telling picture is seen form the quarter over quarter figures of $2.86 billion versus $2.7 billion for June 2013 quarter, which was marginally up.
Loans| Loans and advances, totaling $152 billion net of provision for credit losses at June 2014, grew by 12 percent, or $16.8 billion, compared to the loan portfolio as at June 30, 2013. Non-performing loans totaled $7.8 billion as at June 2014 ($6.6 billion at June 2013) and represented 5 percent of the gross loans compared to 4.8 percent as at June last year.
Deposits| Customer deposits were $205 billion, up 19 percent or $33 billion over the prior year. The increase was driven by growth in fixed deposits and savings portfolios, which increased by 65 percent and 10 percent respectively, over the prior year.
Capital| The Group’s stockholders’ equity stood at $78 billion, up 12 percent over the prior year.
The stock traded last at $18 and puts the PE ratio, at just 3.7 times the current year’s results. NCB declared another dividend of 35 cents per share, bringing the total in the last twelve months to $1.18. NCB remains a strong IC Insider buy rated stock.