NCB boasts of $30.7 billon super profit and $1.6 trillion in assets for 2019

NCB boasts of $30.7 billon super profit and $1.6 trillion in assets for 2019

Sale of Advantage General, JMMB shares and GHL revaluation credited for mega profits in 2019

Observer business writer

Sunday, November 10, 2019

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National Commercial Bank (NCB) Group is boasting of its $30.7 billion super profit made for its just ended financial year, while its assets have climbed to $1.6 trillion.

NCB Group chief financial officer (CFO) and Deputy CEO Dennis Cohen, who made the announcement as he addressed Friday's Quarterly Investors Briefing, declared that 2019 was a pivotal year marked by significant milestones. These include the acquisition of a majority stake in Guardian Holdings Limited (GHL), a major financial services group providing life, health, property and casualty insurance, coupled with pensions and asset management services.

He disclosed that the positive performance for the financial year ended September 30 was bolstered by three main extraordinary items. Firstly the divestment of associate interest in Jamaica Money Market Brokers (JMMB) Limited, which resulted in a $3.3-billion gain from the disposal, as well as the sale of Advantage General Insurance Company at the end of the fourth quarter, realising a gain of $2.6 billion.

This was complemented by a $2.3- billion provisional gain on the revaluation of the associate interest in GHL following the acquisition of the majority interest in the third quarter. Cohen noted that with net profit amounting to $30.7 billion, shareholders will receive the bulk of this $29.6 billion, which represents an improvement of 6 per cent or $1.6 billion over the prior year.

Operating income for the financial year totalled $90.6 billion, a 30 per cent improvement over the prior year, with $31.3 billion of that total earned in the fourth quarter.

“Our banking and investment services and insurance activities contributed equally to this increase, which demonstrates the strength of our diversified business model,” the NCB Group CFO said.

The net result from banking and investment activities grew by 16 per cent or $10.3 billion to $76.1 billion. The growth was primarily as a result of net interest income increasing by $11.6 billion or 33 per cent. The growth in the Jamaican loan portfolio accounted for just under half of the increase, despite lower interest rates.

Net fee and commission income grew by 21 per cent or $3.3 billion. This improved performance stems from the consolidation of GHL coupled with growth in transactions in wealth and payment services.

These increases were partially offset by a decline in gains from the sale of debt securities and increased credit impairment provisions.


The net result from insurance activities increased by $10.6 billion to $14.4 billion. The growth was attributable to the consolidation of GHL's insurance activities, which contributed $7.1 billion to the net insurance revenues.

This was coupled with the improved performance of NCB Insurance Company Limited's life insurance business, which benefitted from improved spread performance and reserve releases.

The group's assets totalled $1.6 trillion, a 65 per cent or $632 billion increase over the prior year.

The growth in the asset base was primarily due to the consolidation of GHL, with total assets of $580 billion. At September 30, 2019, consequent on the group's strategy of regional expansion, approximately half of the group's assets are now outside of Jamaica.

Non-performing loans for the group totalled $22 billion as at September 30, 2019 and represented 5.1 per cent of the gross loans compared to 4.8 per cent as at September 30, 2018. Seventy per cent of the increase in non-performing loans was due to Clarien, which NCB acquired controlling interests in and GHL.

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