NATIONAL Commercial Bank (NCB) on Friday reported net profits of $2.55 billion over the second quarter ending March 31, 2010, a 14 per cent increase over the comparative period last year.

At a press conference held at its Trafalgar Road-based head office to announce the results, the firm said it was a creditable performance considering the challenges in the Jamaican economy.

“NCB’s results show that notwithstanding the significant challenges, difficulties and implementation of the various initiatives which would have had a significant impact on our operations, we were able to produce strong and robust financial results,” stated NCB Group managing director Patrick Hylton.

In addition to the downturn in the economy, the last quarter saw the launch of the Government’s Jamaica Debt Exchange (JDX) programme, expected to squeeze the profitability of local financial institutions as a result of the lower rates carried on Government paper. The results for the March 2010 quarter includes approximately one month of securities income at the lower yields.

During the period under review, NCB’s total operating income increased by seven per cent to $7.1 billion. Net interest income for the quarter was $5.1 billion, up by nine per cent over the corresponding period in 2009. Net fee and commission income increased marginally to $1.4 billion while gain on foreign currency and trading activities declined by 30 per cent to $451 million.

NCB’s Earnings per share (EPS) was $1.03, compared to $0.91 last year, while the Return on Average Equity (ROE) was 23.5 per cent.

Loans and advances, which totalled $86.4 billion (net of provision for credit losses) as at 31 March 2010 declined by $1.3 billion from the loan portfolio as at 31 March 2009. Non- performing loans totalled $2.9 billion as at March 2010 ($2.3 billion as at March 2009) and represented 3.3 per cent of the gross loans compared to 2.6 per cent as at 31 March 2009.

Hylton said that by examining the major areas of business operations, NCB continues to demonstrate its strength and resilience. He said the firm is committed to building a financial fortress that is underpinned by strong capital, strong liquidity, and strong management.

He noted that initiatives of deepening and broadening customer relations, and pursuing greater efficiencies across all business lines will be integral to how the firm performs going forward.

The Wealth Management arm of the bank — NCB Capital Markets — was lauded for its performance over the first half of the financial year. It contributed $1.82 billion in operating profits over the six months ending 31 March 2009, representing 90.8 per cent of the Group’s. NCB Insurance Company recorded a net profit of $883.2 million over the same period.

Dennis Cohen, deputy group managing director and CEO of NCB Capital Markets, said: “The Group is doing far better in all the key leading indicators that effectively drive the sustaining financial performance of the bank such as the growth in our deposit base, growth in our repo book, which has outperformed the market and continued growth in our policyholder liability, a key component in the performance of our insurance segment.”

The Board declared an interim dividend of $0.61 per ordinary stock unit. The dividend is payable on 20 May 2010 for stockholders on record as at 07 May 2010.