National Commercial Bank (NCB) Group is reporting that its acquisition of majority shares in regional insurance giant, Guardian Life Holdings (GHL), is already reaping benefits with operating profits climbing by 105 per cent for the just ended quarter to $9.9 billion.

This represents the highest quarterly performance to date.

Operating profit was $5.1 billion ahead of the December 2018 quarter and $1.2 billion or 14 per cent above the September 2019 quarter, which also included GHL’s results.

The higher operating profit was supported by strong growth in operating income, which totalled $33.3 billion, a 76 per cent or $14.4 billion improvement over the prior year, primarily driven by the consolidation of GHL.

Speaking at the bank’s annual general meeting on Friday, NCB Group Chief Financial Officer Dennis Cohen revealed that net profits for the group and its subsidiaries for the quarter ended December 31, 2019 was $7.8 billion.

Net profit attributable to stockholders was $5.9 billion, a 21 per cent or $1.5 billion decline from the prior year. This was due to the fact that the prior year’s results included a one-off gain of $3.3 billion from the disposal of our interest in an associate company.

BANKING ACTIVITIES

Excluding this gain, net profit would have increased by $1.7 billion or 42 per cent over the prior year.

The net result from banking and investment activities increased by 45 per cent or $7.9 billion to $25.3 billion mainly as a result of net interest income increasing by 41 per cent or $4.1 billion. The consolidation of GHL’s results contributed to 85 per cent of the growth in net interest income.

There was also growth in the loan portfolio which resulted in increased interest income from loans — net fee and commission income growing by 49 per cent or $2.1 billion, which was primarily driven by the consolidation of GHL coupled with growth in transactions in NCB’s payment services (card acquiring and issuing) business segment.

INSURANCE ACTIVITIES

There were also gain on foreign currency and investment activities increasing by 19 per cent or $810 million, mainly as a result of the consolidation of GHL.

OPERATING EXPENSES

The net result from insurance activities of $8.0 billion, increased by $6.5 billion or 434 per cent. The growth was due to the consolidation of GHL’s insurance activities which contributed $7.5 billion to net insurance revenues.

Operating expenses increased by 66 per cent or $9.3 billion to $23.3 billion for the quarter. The consolidation of GHL contributed to the rise in expenses. There was $1.8 billion in asset taxes included in expenses for the quarter, an increase of $217 million or 13 per cent over the December 2018 quarter.

Despite the increase in costs, our cost to income ratio decreased to 67 per cent, down from 70 per cent in the prior year, due to the strong revenue growth.