Clarien Bank doubles profit after NCB acquisition
Published:Wednesday | January 9, 2019 | 12:00 AM
Clarien Bank Limited (CBL), which operates from Bermuda, said that the majority acquisition by NCB Financial Group (NCBFG) contributed to its restructuring and doubling of year-end profits.
"The outlook for Clarien Bank is extremely positive. The consolidation of our partnership with NCB continues to present opportunities for revenue growth and optimized performance as we pursue our vision of building a world-class, digital client experience, accelerating regional expansion, and reinventing our core business," stated Ian Truran, chief executive officer at Clarien, in a notice to shareholders.
Clarien is one of the largest independent, privately owned financial services organisations in Bermuda serving families and corporations in that and other countries.
The bank changed its year-end to reflect that of its major shareholder NCBFG, which is based in Jamaica. Profits for the nine months ending September 2018 at BD$7.3 million (US$7.3 million) more than doubled the US$3.9 million it earned during the 12-month period ending September 31, 2017.
Clarien's non-performing loans (NPL), which are loans not serviced for over 90 days, stood at 11.8 per cent of its loan portfolio as at September 2018, down from roughly 16.7 per cent at December 2017.
"Clarien continues to be encouraged by the reduction in non-performing loans," the company said.
The Financial Gleaner sought a response from the bank as to what accounted for the improvement in NPLs, but had not received a response up to press time.
Partnership will deepen
Truran said the bank's partnership with NCB will deepen going forward and that it was of value to its wealth and asset management, corporate banking, treasury and back-office integration.
In December 2017, NCBFG acquired a 50.1 per cent equity stake in CBL, while Edmund Gibbons Limited retains 31.98 per cent and Portland Private Equity 17.92 per cent.
With the addition of Clarien, the total NPLs throughout the NCB Financial Group grew to $18.2 billion from $5.4 billion in the prior year. This increased the consolidated NPLs as a percentage of loans to 4.8 per cent from 2.5 per cent.
"The continuing improvement in the bank's financial performance was driven by Clarien's strategic partnership with majority shareholder NCB Financial Group," stated Clarien to its investors in Bermuda.
Clarien said the integration and consolidation process with NCB started in the early part of 2018 and achieved improved cost and operational efficiencies.
During the year, the bank launched its mobile banking application, digital authenticator, introduced competitive interest rates for long-term saving products, added fraud detection for cards and increased staff training.
Clarien attained return on equity annualised at 8.3 per cent, compared to 3.4 per cent a year earlier.