NATIONAL Commercial Bank (NCB) reported a 19 per cent reduction in third-quarter net profits.

The bank made $2.5 billion in profit during the three months to June 30, 2012, a fall from $3.1 billion made during the same period last year.

Dennis Cohen, NCB deputy group managing director, said the bottom line was impacted by a 22 per cent decline in gains on foreign currency and investment activities, and a 13 per cent jump in staff costs.

"Those were the primary reasons for the reduction in the profit," Cohen said at an investors' briefing on Friday.

NCB's employees received an 8.5 per cent increase in their wages after an agreement was made with the union, said Yvonne Clarke, the group chief financial officer. That increase was made effective in October last year.

NCB's operating expenses for the third quarter of this year was $5.2 billion, a seven per cent increase over the comparative period in 2011.

A new data centre, which is being constructed on Trafalgar Road, contributed to the fall-off in profitability, the company said.

"We are widening and upgrading the business's information technology," said Cohen, noting that the data centre is being moved to increase the company's reliability.

Increases in electricity costs and loyalty expenses for its credit cards also contributed to the hit on earnings, Clarke said.

"Our flow of income decreased, and so did our profit," she said.

NCB and NCB Capital Markets Limited approved the acquisition of Advantage General insurance Company Limited (AGIC) a few weeks ago. The NCB group received authorisation to acquire 96.24 per cent of AGIC, which provides it with a presence in the general insurance sector.

AGIC has some of the same goals of the NCB group, such as providing life planning services to individuals, said Cohen. So merging both companies was a step towards solidifying service delivery in that area, he noted.

"Our aim is to not only be a commercial bank; our move into the insurance sector sends a signal that we are on our way to being a one-stop financial institution," said Cohen, adding that general insurance services will complement the group's mortgage and motor loan programmes.

The NCB deputy managing director said the company is not planning to reduce its workforce, but will instead move staff to different areas.