Massive NCB profit hike
published: Friday | March 7, 2003
By Andrew Green, Staff Reporter
PRE-TAX PROFIT at National Commercial Bank (NCB) soared by 130.6 per cent to $452 million in its 2003 first quarter, according to its recently released results.
This performance was based on solid improvements in income from its operations for the three months ended December 31. But another critical ingredient was the sale of part of its holding in Jamaica Money Market Brokers (JMMB).
Net interest income and other income rose 29.3 per cent to $1.9 billion in the period, a $425 million increase. More than half of this increase was accounted for by the rise in income from loans. Income from loans grew by $215 million to $573 million, a 60 per cent increase. By comparison, income from securities rose by $272 million to $2.7 billion, an 11 per cent increase. Thus, loan income grew from 14.5 per cent of the income from securities in the December 2001 quarter to 20.9 per cent of that figure for the 2002 quarter.
Interest expense rose 4.9 per cent to $2.1 billion in the quarter. And the bank also boosted its income from fees and commissions by 9.7 per cent to $361 million.
Staff costs rose by a healthy 25.4 per cent clip, up $186 million to $919 million. Other operating expenses went up 23.5 per cent to $504 million.
Overall, non-interest expenses climbed by $322 million to $1.6 billion, a 25.7 per cent increase.
Profit before exceptional item and taxes grew $102 million to $298 million for the quarter. This was a 52 per cent increase.
And the company recorded a $153 million gain from the sale of JMMB shares, a senior source at the bank told the Financial Gleaner.
The bank had indicated during the JMMB share offer last December that it would be selling 35.5 million of its shares, bringing its holding down to 141.9 million units. This would still have left it with 9.7 per cent of the JMMB shares.The profit hike resulting from this exceptional item pushed NCB pre-tax profit up $256 million to $452 million.
Taxes at $12.6 million in the quarter left net profits at $439 million. Compared with the 2001 December quarter, net profit rose $271 million or 161.3 per cent. This generated earnings per stock unit of 18 cents, an increase of 11 cents over the previous December quarter earnings.
