BRUCE Bowen’s first year at the helm of National Commercial Bank Jamaica Limited (NCBJ) yielded a 21 per cent increase in net profit to $9.31 billion in 2024, driven by higher-interest income.

This was revealed in NCBJ’s 2024 audited financials which were published last Friday.

In the first year under Bowen’s leadership, NCBJ reported a 12 per cent increase in interest income to $63.97 billion, up from $56.88 billion. Net interest income rose nine per cent to $45.53 billion. The bank also saw a 10 per cent increase in net fee and commission income to $20.24 billion, while expenses related to this income source grew at a slower rate.

However, despite those major top-line improvements, NCBJ’s credit impairment losses surged 75 per cent to $7.29 billion in the period, from $4.18 billion a year earlier. The lender’s provisions for bad debt were the highest since 2020, when it set aside $8.14 billion amid the COVID-19 pandemic.

Credit impairment losses are provisions set aside by lenders for potential losses on loans. This doesn’t necessarily mean the loan has defaulted, but rather reflects accounting rules for managing risk. If the lender later recovers the funds, the recovery is recorded on the income statement.

The impact of this higher credit impairment loss was that NCBJ’s net operating income increased by four per cent, from $70.33 billion to $72.84 billion. NCBJ’s operating expenses were restated for the 2023 period, from $60.65 billion to $61.82 billion. As a result, operating expenses marginally increased year on year to $62.07 billion.

NCBJ’s net profit improved 21 per cent from a restated $7.71 billion ($8.498 billion) to $9.31 billion. NCBJ recorded $5.70 billion in dividend income from its subsidiaries in 2024. NCBJ’s net profit in 2022 was $13.96 billion, the last period before there were several management changes.

NCBJ’s total assets grew five per cent from a restated $896.71 billion to $938.70 billion with cash in hand and balances at the central bank at $91.38 billion. Total liabilities rose five per cent to $828.80 billion, with deposits moving from $532.55 billion to $569.13 billion. Total equity/capital increased four per cent to $109.89 billion, with regulatory capital standing at $86.20 billion.

NCBJ’s loans and advances, net of provision for credit losses, grew by $8.76 billion to $455.96 billion for the 2024 FY. This is one of the lowest-recorded, year-over-year changes for NCBJ in the last five years for net loan growth. Its unaudited financial submission to Bank of Jamaica (BOJ) noted that it had a credit loss provision of $11.44 billion, which means the gross loan balance would be about $467.40 billion versus $456.49 billion in September 2023. NCBJ’s net loan balance in June was $467.92 billion.

According to BOJ’s unaudited data for September 2024, the overall commercial banking space saw a $108.34-billion increase in net loans and advances to $1.32 trillion. Bank of Nova Scotia Jamaica Limited (BNSJ) was the biggest beneficiary in this period as its net loan balance grew $42.08 billion, while CIBC Caribbean Bank (Jamaica) Limited grew net loans by $19.75 billion. JN Bank Limited grew net loans by $19.30 billion, Sagicor Bank Jamaica Limited grew net loans by $14.03 billion, JMMB Bank (Jamaica) Limited grew net loans by $8.68 billion, First Global Bank Limited grew net loans by $4.95 billion, and Citibank N.A. grew net loans by $1.14 billion.

BOJ data revealed that loans balances amongst deposit-taking institutions grew $111.94 billion or eight per cent to $1.497 trillion. However, past due loans between one to three months increased 29 per cent from $38.08 billion to $49.14 billion, while non-performing loans over three months increased six per cent to $36.04 billion.

Bruce Bowen, CEO of National Commercial Bank Jamaica Limited.