NCB reports 28% profit growth but..

NCB Financial Group reported net profit of $4.6 billion for the quarter ended December 2017 and hiked their dividend. Profit increased 28 percent or $1 billion over 2016. Revenues net of interest cost rose 17 percent to $16.7 billion from $14.2 billion in 2016.
On the surface the gains in profit sounds great, but closer examination reveals that $1.5 billion comes from a one off gain resulting from the acquisition of majority shares in Clarien. The group incurred cost associated with staff separation that help swell staff cost to $5.9 billion from $3.75 billion in 2016 while Policyholders’ and annuitants’ benefits and reserves rose from $1.03 billion in the first quarter of 2016 to $1.78 billion.
Return on average equity increased to 15.7 percent from 14.0 percent in 2016. Net loans grew 63 percent to $322.4 billion from $197.9 billion and from $218.6 billion at the end of September 2017. Growth was due to the consolidation of Clarien Group, accounting for $93 billion and increases in retail loan portfolio
Segment results were mixed with consumer and small and medium enterprise Retail and SME being worse off in 2017 than 2016 by $290 million and Payment Services for the sector increasing profit by $325 million to $1.2 billion. Corporate banking enjoyed lower operating profit of $95 million leading to $710 million in the quarter, Treasury & Correspondent Banking was virtually flat at $1.6 billion. Wealth, Asset Management and Investment Banking grew strongly by $440 million to $1.2 billion, Life and Pensions had strong growth of $438 million to $1.3 billion but general Insurance was $536 million worse off in ending with a loss of $108 million.
NCB hiked interim dividend to 70 cents per share up from 60 cents in 2017. The dividend is payable on February 26, for stockholders on record as at February 9, 2018.
NCB Financial, closed at J$100.85 trading 59,911 shares on the Jamaica Stock Exchange and TT$6.60 ($J$123) trading 261,082 shares, on the Trinidad and Tobago Exchange on Thursday.

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