NCB Group releases six month results - Record drop in net profit
published: Sunday | May 1, 2005

NCB Atrium, Trafalgar Road.

THE NATIONAL Commercial Bank Group (NCB) is reporting a drop in its net profit for the six months ended March 31, 2005. The group's net profit fell to $1.7 billion compared to $1.9 billion for the corresponding period of the previous year, a decrease of $177.3 million, or nine per cent. Operating income (less interest expense) for the six months was $7.9 billion, an increase of $1.3 billion or 19 per cent when compared to the same period of the previous year. Net trading income increased by $955.1 million or 143 per cent compared to March 2004 due mainly to sale of debt and equity securities and fair value gains.

REVENUES

The group's revenues increased by a little over one per cent, to $2.9 billion compared to the corresponding six months of the previous year. At the same time interest income from securities declined by $1.7 billion or 19 per cent due to the reduction in interest rates, but this decrease was offset by continued growth in loan income and non-interest income.

LOAN PORTFOLIO

For the six months, NCB's loans and advances totalled $38.9 billion, registering an increase of $4.9 billion or 14.3 per cent. Significantly, at the end of the quarter the growth in loans and advances represented a $5.6 billion or 17 per cent increase over the previous year.

The aggregate amount of non-performing loans amounted to $1.6 billion compared to $1.47 billion as at September 30, 2004, the end of the group's financial year. Significantly, there has been a reduction in loan loss provision. Provision for credit losses for the six months to date is $80.6 million compared to $229.5 million for the corresponding period of the prior year, a 65 per cent decrease.

As at March 31, 2005 NCB's accumulated provision for credit losses of $2.24 billion was 140 per cent of non-performing loans.

During the period under review, the group experienced a growth in its asset base which now stands at $188.5 billion, a growth of $12.6 billion or seven per cent since its year end results to September 30, 2004. NCB says that the increase in the asset base is mainly attributable to the growth in the loans and advances and reverse repurchase agreements of 14 and 17 per cent, respectively.