NCB makes record $3.2 billion in profit

BY STEVEN JACKSON Business reporter

Saturday, April 25, 2015

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NATIONAL Commercial Bank of Jamaica (NCB), described as the island's most profitable bank, announced that it made its highest quarterly profit ever for its March 2015 second quarter.

NCB made $3.2 billion in after-tax net profit for its March second quarter 2015 or 7.0 per cent higher year-on-year.

"This is probably our best quarterly result," stated Dennis Cohen, group finance and deputy managing director, in his address at the NCB investor briefing held at the NCB Wellness Centre in Kingston on Friday. "For that I would like to thank our NCB team, our customers and stakeholders for their continued loyalty and confidence."

The group made more profit based on growing revenues to $11.67 billion in the March quarter 2015 compared to $10.3 billion a year earlier. That gives investors earnings of $1.32 per share, up from $1.24 a year earlier.

NCB is incorporated in Jamaica with 47.9 per cent held by AIC Barbados Ltd. The ultimate parent company is Portland Holdings Inc incorporated in Canada and controlled by Michael Lee-Chin, chairman of the bank.

The bank remains optimistic for maintaining its profit levels for the remainder of its financial year.

"In terms of outlook we see it as very positive. We expect our performance to continue. We know there are challenges but we expect to be successful," said Patrick Hylton, group managing director, in his address.

The increased profits filtered through six of the seven banking segments at the group. The segment profits included its retail division at $607.2 million profit; payment services at $733.2 million; corporate banking at $573.5 million; treasury & correspondent banking at $2.4 billion; wealth, asset management and investment banking at $1.56 billion; life insurance & pension at $1.6 billion; and general insurance at $611.9 million.

Profit levels actually dipped over six months ending March to $5.4 billion or 3.0 per cent year-on-year due mainly to the adoption of new accounting rules which effectively required booking asset taxation in one quarter. It therefore removed the ability of the bank to accrue the asset tax. The asset tax absorption affected key performance indicators of the bank, including its return on average equity.

"The financial impact of the adoption for the six months ended March 2015 is a charge of $1.2 billion on the consolidated income statement," stated the financials.

The adoption of International Financial Reporting Standards (IFRS) 21 recognised the asset tax liability in full as at October 2014 for asset-based taxes which were progressively recognised during the year ending September 2014 for amounts due and paid in March 2015. Group companies with an assesment date of December 2014 were recognised as at January 2015, stated the bank financials.

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