Growth in annuity business, more fees, lower wage bill drive NCB profit
Published:Sunday | May 1, 2011 | 12:00 AM
National Commercial Bank (NCB) has reported a 15 per cent increase in net profit to J$6.12 billion for the six-month period ending March 31, 2011.
The bank reported profit of J$5.3 billion in the comparative period a year ago.
Operating income also climbed to J$17.16 billion, representing 16.7 per cent, or J$2.45 billion, more than the 2010 period.
The banking group attributes the strong increase in operating revenues to an increase of J$1.4 billion in insurance premiums due to annuities booked, and gains on foreign currency and investments activities, which improved by J$928 million.
Net fees and commission income also increased to J$3.1 billion, due, the bank said, to increased volumes of new retail and SME loans as well as card transactions. NCB collected close to a quarter of a billion more in fees than it did at half year 2010.
salaries down
NCB also reported savings on one of its big-ticket cost items - salaries - which fell by J$447 million at half year to J$4.6 billion.
However, total expenses rose J$1.3 billion, or 15.3 per cent, to J$9.56 billion, largely pushed up by associated cost from growth in the annuity business, the bank said.
For the six-month period, the bank reports that all its business segments showed improvement except for corporate banking, which was affected by a large loan that became non-performing during the reporting period.
"The loan is fully secured, and consistent with our practices, we have taken a full regulatory provision, however, no losses are anticipated," NCB said.
The wealth-management segment, which reported increased gains from investment activities, contributed operating profits of J$2.15 billion to the banking group, while the insurance and pension-fund management unit also reported operating profits of J$1.24 billion.
NCB also reported a seven per cent increase of its balance sheet assets to J$346.8 billion at March 2011, including marginal movement in the value of its loan book by J$1.5 billion, or 1.8 per cent, to J$88.3 billion.
Profit performance in the two quarters of the bank's financial year were close to equally split - J$3 billion in the first, and J$3.1 billion for the second period.
The results put the bank on track to hit the J$12 billion profit mark, a result that would eclipse the J$11 billion made last year.