NCB reaffirms standing as profit king - Stake in JMMB, KPREIT adds to gains

The results for year end September 2011 were a near 18 per cent improvement over the previous year.

The results reaffirms NCB's nominal standing as the most profitable Jamaican stock-market company, having overtaken Scotiabank Jamaica two years ago.

It will pay shareholders 34 cents per share in an interim dividend distribution on December 1, amounting to a total payout of J$839 million.

NCB said J$1 billion of the profit was due to gains from its associated companies, including its new acquisition of 29.3 per cent of Jamaica Money Market Brokers Limited (JMMB).

"This acquisition, as well as the group's 25.17 per cent share of Kingston Properties Limited, have been accounted for as associated companies and gains of J$1 billion has been included in NCB's net profit," the bank said in a statement.

For the year, NCB also increased its operating income by 18 per cent to J$34.7 billion.

Gains on foreign-currency and investment activities moved up to J$4 billion, more than twice the J$1.9 billion reported in the last period. This, the bank said, was due to gains from fixed-income trading and foreign-exchange gains from translation and trading.

Premium income from the company's insurance subsidiary also grew significantly to J$2.9 billion, as a result of growth in its annuities business.

Net fee and commission income totalled J$6.4 billion, an increase of 8.47 per cent, due it said to increased fees from growth in loans and transactions in retail banking and SME segments.

"This performance emphasised our continuous drive for productivity coupled with cost-efficiency interventions which were also implemented during the course of the year," said Patrick Hylton, NCB's group managing director, in a company statement.

Operating expenses grew slightly for the reporting period to J$19 billion, up from J$16 billion last year.

Among the line items, staff cost dipped slightly, and a decline was seen in provision for credit losses, from J$948 million to J$769 million.

The bank's non-performing loans doubled in the period from J$3 billion to J$6.7 billion 7.16 per cent of gross loans. It has previously attributed the rise in the bad-debt portfolio to Palmyra resort, which has been placed in receivership.

Other operating expenses rose to J$8 billion from J$5 billion.

The bank's wealth segment contributed operating profits of J$4.7 billion, representing an increase of J$1.1 billion or 31.48 per cent over the prior September 2010 period.

The contribution from insurance and pension-fund management segment also increased with operating profits of J$2.4 billion.

NCB is Jamaica's largest bank with assets now reported at J$358.8 billion.

The bank plans to list on the New York Stock Exchange.

JPMorgan was selected as the investment bank for the initial public offering, which aims to raise US$175 million.

sabrina.gordon@ gleanerjm.com