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PERFORMANCE HIGHLIGHTS
Year Ended September 2010 compared with Year Ended September 2009
- Net Profit of $11.07 billion, an increase of $827 million or 8.1%.
- Earnings per Stock Unit of $4.50 grew by $0.34 or 8.1%.
- Operating Revenue of $29.31 billion, increased by 8.0% or $2.17 billion.
- Cost to Income Ratio increased to 51.3% from 47.7%.
- Risk-Based Capital Adequacy Ratio improved to 16.5% from 14.6%.
- Total Assets of $334.97 billion, increased by 6.3% or $19.87 billion.
- Net Loans of $86.0 billion, fell by 2.5% or $2.18 billion.
- Investment Securities of $200.13 billion, increased by $32.41 billion or 19.3%.
- Customer Deposits of $144.28 billion, increased by 10.7% or $13.95 billion.
- Return on Average Equity declined to 24.66% from 28.34%.
- Return on Average Assets increased to 3.41% from 3.38%.
Quarter ended September 2010 compared with Quarter ended June 2010
- Net Profit of $2.99 billion, increased by 8.6% or $236 million.
- Earnings per Stock Unit of $1.22 grew by $0.10 or 8.6%.
- Operating Revenue increased by $503 million or 7.1%.
- Operating Expenses increased by $283 million or 7.5%.
- Return on Average Equity increased to 25.15% from 24.13%.
- Return on Average Assets increased to 3.64% from 3.42%.
- Cost to Income Ratio decreased to 49.0% from 50.2%.
We continue to report strong profit performance while building our capital and growing our balance sheet. This overall improvement has further strengthened our group and our capital ratios far exceed the minimum regulatory requirements. The diverse products and services offered by our group allow us to meet the varied needs of our customers despite the challenges in the business environment.
SEGMENT PERFORMANCE
Banking
The Retail, Corporate and Treasury units of the banking segment reported combined operating results of $8.75 billion for the year ended 30 September 2010; this represents a decrease of $911 million from the prior year. The decline in the operating results for these commercial banking segments is primarily as a result of increased staff and operating costs.
Loans and advances, which totalled $86.0 billion (net of provision for credit losses) as at 30 September 2010 declined by $2.2 billion compared to the loan portfolio as at 30 September 2009.
This decline is due to a reduction in the rate of loan growth for the Corporate Unit as well as the effect of the appreciation of the Jamaican dollar during the year; approximately 50% of NCB’s loan portfolio is denominated in US dollars; and the Jamaica dollar appreciated by 3% between September 2009 and September 2010.
Non-performing loans totalled $3.0 billion as at September 2010 ($2.3 billion as at September 2009) and represented 3.4% of the gross loans compared to 2.6% as at 30 September 2009. Our provision coverage as at September 2010 was 136.3% compared to 147.3% at September 2009.
NCBJ remains the largest commercial bank when measured by profit, assets, branch network and capital base.
Wealth Management
Our wealth and asset management segment contributed operating profits of $3.55 billion for the year ended 30 September 2010; the result for this segment reflects a $1.3 billion or 55.2% increase over the prior September 2009 period. The significant growth over the prior year’s results is due to two main factors:
- increase in net interest income resulting from lower cost of funds, and
- non-recurrence of mark to market losses from trading activities undertaken in the prior year.
NCB Capital Markets Limited (NCBCM) contributes 92% of the operating profit for this segment and achieved a net profit of $2.5 billion for the year.
Insurance
Our insurance segment reported operating profits of $1.99 billion for the year ended 30 September 2010, representing a decrease of 4.2% or $87 million from the prior year’s results. NCB Insurance Company Limited (NCBIC) contributes 100% of the profit for this segment and recorded net profit of J$1.7 billion for the year.
CAPITAL
The Group’s Stockholders’ Equity of $48.8 billion increased by $7.8 billion or 19.0% when compared to 30 September 2009.
- The Risk-Based Capital Ratio for NCBJ was 16.5% which exceeds the minimum requirement of 10% stipulated by the Bank of Jamaica (30 September 2009 – 14.6%).
- The Capital to Risk Weighted Assets Ratio for NCBCM was 97.8% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (30 September 2009 – 60.8%).
- The Solvency Ratio for NCBIC was 26.5% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (30 September 2009 – 23.2%).
DIVIDENDS
On 03 November 2010, the Board declared an interim dividend of $0.45 per ordinary stock unit. The dividend is payable on 01 December 2010 for stockholders on record as at 18 November 2010.
AWARDS
We are the proud winner of the Human Resource Management Association of Jamaica (HRMAJ) Golden Leader in HR Innovation Award. This award was for our:-
- Online Performance Appraisal System (a fully automated, web based, paperless appraisal process)
- AutoPro (a web based automated workflow solution).
The HRMAJ HR Innovation Award recognises creative and innovative initiatives and unique approaches adopted by companies to provide solutions to problems or challenges that they face and which could hinder their progress for goal achievement.
NCB was also recognised by United Way of Jamaica as the “largest single local corporate contributor” to the voluntary organisation, which was established 25 years ago. We were presented with a 25th Anniversary Partnership Award in recognition of the bank’s contribution over the years, as a member of the Nation Builder’s Club. In congratulating NCB on the part the bank has played in helping to improve the lives of the persons served by United Way, Winsome Wilkins, CEO of United Way of Jamaica, said “NCB continues to play a significant role in nation building, especially through voluntary organisations such as ours.”
These are in addition to the foloowing awards that were won during the financial year.
- For the second consecutive year, NCBJ was awarded the "2009 Bank of the Year in Jamaica" by the Financial Times Banker Magazine
- 2010 World Finance Best Banking Group, Jamaica and Most Innovative Bank, Jamaica
- NCB Insurance Company was awarded the prestigious World Finance's coveted award for Pension Fund Manager of the Year, Caribbean.
- We were also named Jamaica's overall Employer of Choice at the Jamaica Employers Federation (JEF) Annual Awards Ceremony where we placed first in the Employer of Choice (Large Company Category - 500+ Employees) and HighestEmployee Satisfaction award categories.
- We were also recognized by the Jamaica Exporters' Association (JEA) for being the best service provider in the financial sector to exporters, after garnering the most votes from the members of the JEA.
- We also received several important awards at the 2009 Jamaica Stock Exchange Best Practice Awards where NCBCM won the Corporate Disclosure Award and NCBJ placed second. NCBCM also took home the Best Website Award and NCBJ placed second in the PSOJ Coporate Governance Award.
COMMUNITY RELATIONS
NCB's charitable activities are geared towards empowering individuals to create the change needed in Jamaica today by providing some of the resources required. In pursuit of our objective of Engaging in Nation Building, we focused on education, community development, youth leadership, and entrepreneurship through our philanthropic arm, the N.C.B. Foundation..
Our main area of focus for the quarter was education generally and specifically in scholarships and "Back to School" activities. We awarded scholarships, grants and bursaries totalling $13 million to over 200 students at the primary, secondary and tertiary levels. We also supported a number of summer programs and other activities which were geared towards assisting our youth in academic and entrepreneurial pursuits and preparing students from inner city communities for the new school term.
NCB continues to reach beyond the boundaries of financial services as we commit to not only doing well but also doing good. We wish to express our deep appreciation to our staff members for thier enthusiastic involvement in community activities.
To our customers, we say thank you for your continued loyalty, confidence and support; together, We make it happen.
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