NCB boosts profit with $2b of tax credits
Published:Thursday | April 30, 2020 | 8:41 PM
NCB Financial Group grew net profit by half-billion dollars to more than $5 billion for the quarter ending March, but only because it benefited from tax credits of nearly $2.2 billion.
Otherwise, its profit would have declined in the quarter.
Jamaica’s largest banking conglomerate says the economic impact of the COVID-19 pandemic has shown up in losses on its investment activities and loan provisions, but that it continues to adjust operations, including offering customers alternative electronic channels, in response to social distancing and other virus containment measures.
NCB’s profit before tax was $3.4 billion in the quarter, which is half the pretax profit of $6.6 billion it reported in the 2019 period. Its profit after tax credits was $5.59 billion, up from $5.01 billion in 2019.
“The tax credit was due to certain entities within the group having significant amounts of income that was not subject to income tax compared to taxable income in the March quarter,” the bank said in its earnings report. The conglomerate operates a commercial bank, insurance and investment subsidiaries.
NCB, which released its second quarter results after market close on Thursday, says the group began feeling the effects of COVID in March. That's when Jamaica recorded its first case of the virus.
Over six months, its profit improved from $12 billion to $13 billion. However, the picture changes when the portion of its profit due to non-controlling interests are eliminated. Over six months, profit attributable to shareholders dropped 23 per cent to $9.6 billion.
The 2019 results included a one-off gain of $3.3 billon, minus which half-year profit attributable to shareholders would have increased by four per cent, the bank said.
NCB Financial is the most profitable company on the stock market, achieving a net profit of $30 billion last year after acquiring a controlling stake in the Guardian Holdings insurance group of Trinidad & Tobago.