CHANGES in the income tax regulations affecting its insurance subsidiaries added nearly $1 billion to tax assessed, year over year, for the National Commercial Bank Limited, but the group still managed to post net profit of $12.3 billion for the financial year ended September 30, 2015.

As explained in notes attached to the audited financial statements, with effect from January 1, 2015, the group’s life insurance subsidiary became subject to income tax on its taxable profits at a rate of 25 per cent, compared to investment income tax of 15 per cent and a 3 per cent tax on premium income under the previous tax regime.

This resulted from the new Provisional Collection of Tax (Income Tax) Order, 2015, issued on September amending the income tax regime for life insurance companies and effective for the year of assessment 2015.

The year’s results therefore reflected income tax at 25 per cent on the taxable profits of the life insurance subsidiary for the nine-month period from January 1, 2015 to September 30, 2015, as well as investment income tax for the three-month period from October 1, 2014 to December 31, 2014 and premium tax at 3.0 per cent for the three-month period from October 1, 2014 to December 31, 2014.

With the new tax charge, net profit is still tracking below-record results in 2011 when net profit surged above $13 billion.

For the year ended, earnings per share declined marginally from $5.01 for 2014 to $5.00. Net profit for financial year 2014 was also restated to fall within a similar bandwidth at $12.33 billion.

The group, however, grew assets from a restated $499.35 billion in 2014 to $523.82 billion in the year ended, an improvement of 4.9 per cent.

It also saw growth, year over year, in income lines, with net interest income climbing to $25.96 billion up from $25.66 the year before; and net fee and commission income climbing to $9.79 billion up from $8.67 billion in 2014.

The group also saw gains on foreign currency investments of an improved $3.75 billion compared to $2.52 billion the year before.

Tax assessed for the year ended was $4.08 billion when compared to $3.14 billion the year before, an increase of 29 per cent.

Staff expenses for the year ended climbed to $11.94 billion when compared to $11.52 billion the year before; feeding into increased total expenses of $31.47 billion for the year ended, compared to costs of $29.34 billion in 2014.