Profit surged 89 percent at NCB Financial for the six months to March from a combination of higher revenues and reduced costs in some areas, driving profit 74 percent higher in the March quarter to $5.6 billion compared with the same period in 2023, with $3.2 billion and surged for the half year to March with $8.7 billion, from $4.6 billion in 2023.
Net interest income rose to $9.4 billion in the second quarter of this year, from $8.2 billion in the prior year’s second quarter and for the six months, jumped 15.6 percent to $18.85 billion from $16.3 in the 2023 half previous half year. Net fee and Commission income went from $5.3 billion in the $6 billion in March 2024 quarter and from $11 billion in the half year in 2023 to 12.5 billion in the current year.
Credit impairment losses jumped sharply to $1.9 billion in the March quarter from $1.2 billion last year to $2.77 billion in the half year, compared with $2.4 billion in 2023. Dividend income amounted to just $171 million in the March 2024 quarter, down from $488 million in the previous year. The half year is essentially flat, at $1.26 million. Insurance activities delivered profits of $11 billion for the latest quarter, up from $9.3 billion in the previous year. For the half year it surged to $25.2 billion from $16.7 billion in the comparative period in 2023.
Operating expenses slipped to $21.76 billion in the March 2023 quarter from $22.8 billion the previous year and for the half year rose to $47.9 billion from $45.8 billion in 2023. The major contributing factor to cost savings is staff costs, which fell from $14.3 billion in the 2023 March quarter to $13 billion this year and dropped to $26.6 billion for the six months, from $27.5 billion in 2023.
A loss of $3.4 billion is reflected in other comprehensive income in the March 2024 quarter compared with a surplus of $5.7 billion, with the six month period ending up with a loss of $1.2 billion compared to a surplus of $28.3 billion in 2023, effective reducing the quarterly overall profit to $1.4 billion compared to $5.2 billion in 2023 and for six months $7.7 billion versus $20.9 billion in the previous year that is attributable to the NCB Group shareholders.
While most eyes are on the profit statements, the results shown by the various segments are of critical import as they show details of revenues and profit for each segment, enabling investors to have greater insight into the overall results.
Results for the six months show the Consumer and Small Business Enterprise segment generating revenues from outsiders of $21.5 billion, up 17.5 percent from $18.3 billion in 2023 and net segment income of $7 billion in 2024, up 23 percent versus $5.7 billion in 2023. Payment Services delivered a solid 85 percent rise in revenues to $17.2 billion in 2024 with a net position of $4.5 billion in the 2024 half year up from $9.3 billion in revenues in 2023, with net results of $3.4 billion, before internally allocated costs.
Corporate and Commercial banking had a 7 percent growth in revenues to $8 billion and net segment results of $4 billion compared with revenues of $7.5 billion in 2023 as net results surged sharply over $1.18 billion in 2023. Treasury and Correspondent banking generated revenues of $11.77 billion up from $10.58 billion with a net position of $6.9 billion in 2024 compared with $5 billion. Wealth, Asset Management and Investment Banking generated a 38 percent growth in revenues of $14.85 billion and a net position of just $1.17 billion in 2024, with revenues of $10.7 billion in 2023 and net results of $3.5 billion. Life and Health Insurance and Pension Fund management produced a 32 percent increase in revenues to $58.58 billion in 2024 as net results surged to $15.5 billion compared with revenues of $44.4 billion in 2023 with net segment results of $5.76 billion while General Insurance accounted for revenues of $37.7 billion, up 27 percent over 2023 and net results of $3 billion compared with 2023, with revenues of $29.7 billion and profit of $4.3 billion.
NCB declared a dividend of 50 cents to be paid in June.
Loans grew moderately by 6 percent from $595 billion in March 2023 to $633 billion in 2024 while investment securities moved by 9 percent from $763 billion to $833 billion this year. Customer deposits grew 6 percent to $755 billion. Shareholders’ equity ended the period at 160 billion, up from $138 billion at the end of March 2023. Earnings per share for NCB Financial grew from $1.39 to $2.36 for the quarter and from $1.99 in the 2023 half year to $3.68. ICInsider.com projects earnings for the full year to September at $8.50 with a PE of 7.5 well below the market average of 12.6 at the last traded price of $64 on Friday. NCB is selling at a premium to Scotia Group with a lower PE of 6 times 2024 earnings and pays a dividend that provides a much better yield of 4 percent versus 3 percent for NCB. With NCB relative overvaluation compared with its nearest competitor, the current APO is going to provide added supply of shares on the market that is likely pressure the stock price for some time.
Shareholders on record on May 27 are set to receive a dividend of 50 cents per share payable on June 10.
