For the six months ended March 31, 2013 | Operating income declined by $26 million, when compared with the six months ended March 31, 2012, mainly as a result of a $2.4 billion reduction in gains on foreign currency and investment activities due to losses arising from NCB’s participation in the debt exchanges, plunging income for foreign currency and investment activities, declining to a loss of $729 million in the march quarter compared to a profit of $1.4 billion in 2012.
For the three months ending March 2013 | Compared with the three months ended December 2012 net profit of $1.7 billion, decreased by 37.4%, or $1.0 billion while earnings per stock declined by 37.4%, to $0.71 from $1.13. During the quarter NCBJ group accepted government’s debt swap offer and exchanged $118 billion of eligible securities. The primary impact of the exchanges is a reduction in coupon rates, an immediate hit from loss from the difference in market value from the amounts received from new instruments and the extension of the tenure of the securities. However, the eligible securities involved are marketable securities and the securities received was lower than the value of the securities tendered, resulting in losses on some of the instruments exchanged. The group stated that they have identified a number of mitigating measures to address the on-going reduction in yields, most of which have already been implemented.
For the six months ended March 31, 2013 | Net interest income increased by 9.8%, or $1.0 billion, primarily due to growth in loans and investments. Net fee and commission income, grew by 11.6%, or $407 million, due primarily to increased card transaction volumes in the Payment Services segment, as well as increased fees earned from new loans. Premium income increased by 73.7%, or $747 million due mainly to the acquisition of Advantage General Insurance.
Provision for credit losses | Declined by 30.8%, or $470 million, due mainly to losses recorded on a large loan last year, while operating expenses increased by $646 million in the six months ended March, over the six months ending March 2012, mainly as a result of:
- Other operating expenses, increasing 27.7%, or $967 million, primarily due to insurance benefits and reserving expenses related to the acquisition of Advantage General Insurance and asset taxes.
- Depreciation and amortisation charges increased $48.5%, or $179 million, due largely to increased capital expenditures.
Loans and advances | Increased to $128.8 billion at the end of March 2013, growing 24.9%, or $25.7 billion, compared to the loan portfolio as at March 2012. Non-performing loans totalled $7.5 billion ($7.5 billion as at March 31, 2012) and represented 5.7% of the gross loans compared to 7.1% as at March 31, 2012.
Dividend Declaration | NCB declared a dividend of $0.16 per share payable on May 24. The stock closed at $18.56 at the end of trading on Friday with 253,195 shares trading the day after the results were released.
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[…] 2013 profit was also hit with a huge $1.5 billion charge, the result of losses picked up when they exchanged high yielding government bonds for lower yielding ones. Had these costs not been incurred, earnings would have been around $4.10 […]