Financial Results
For The Nine Months Ended June 30, 2023
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KEY RESULTS - | |||
NINE MONTHS | $9.7B | $2.2T | $184B |
ENDED | |||
JUNE 30, 2023 | |||
Net Profit | Total Assets | Equity | |
KEY RESULTS - | |||
QUARTER | |||
ENDED | $5.5B | $2.2T | $184B |
JUNE 30, 2023 | |||
Net Profit | Total Assets | Equity |
Third Quarter 2023
Report to Shareholders
Kingston, Jamaica - August 9, 2023
The Board of Directors approved the release of the following financial results for NCB Financial Group Limited (NCBFG) and its subsidiaries for the nine months ended June 30, 2023.
NCBFG reports unaudited consolidated net profit of $13.7 billion for the nine months ended June 30, 2023, a 47% or $12.2 billion reduction from the prior year. Consolidated net profit attributable to stockholders of the parent totalled $9.7 billion, a decline of $8.9 billion or 48% from the prior year. For the quarter ended June 30, 2023, the Group reported net profit of $7.4 billion, a $2.4 billion or 48% improvement over
$4.22 | 0.85% | 7.76% |
Earnings per Share | Return on Assets | Return on Equity |
$2.38 | 1.36% | 12.18% |
Earnings per Share | Return on Assets | Return on Equity |
the prior quarter ended March 2023. Net profit attributable to stockholders of the parent for the June 2023 quarter was $5.5 billion, an increase of $2.1 billion or 62% over the March 2023 quarter.
The Group's diversified business model and strong financial position continues to facilitate commendable financial benefits despite the challenging economic environment. This underpins the importance of our strategic transformation journey as we continue to digitally enable the organisation while placing a strong emphasis on customer centricity. We are well equipped to successfully execute our strategy and will create long-term shareholder value.
The Group's objective of building a Caribbean financial ecosystem to deliver high quality service to our customers remains unchanged and we will continue to execute on a range of growth and transformation initiatives. We are increasing our focus on efficiency and cost management while being uncompromising in the delivery of service for an exceptional customer experience.
For more information, contact:
INVESTOR RELATIONS
Jacqueline De Lisser
Head
Group Investor Relations & Financial Advisory
Email: DelisserJN@jncb.com
MEDIA RELATIONS
Nicole Campbell
Head
Group Marketing & Corporate Communications
Email: CampbellNT@jncb.com
Financial Results | 2 |
For The Nine Months Ended June 30, 2023 |
Net Profit of $9.7 billion (attributable to stockholders of the parent)
Group Performance
There was a rebound in the performance during the third quarter mainly due to improved gains from investment activities in our Wealth, Asset Management and Investment Banking segment. This contributed to operating income of $35.6 billion for the quarter ended June 30, 2023, reflecting an increase of 13% or $4.0 billion over the March 2023 quarter.
Return on assets (ROA) and return on equity (ROE) for the June 2023 quarter improved to 1.36% up from 0.94% and 12.18% up from 7.79%, respectively. The rolling twelve-month ROA and ROE were 1.31% and 11.12%, respectively. The cost to income ratio for the June 2023 quarter declined to 74.09% down from 76.12% in the prior March 2023 quarter. We are committed to continuing our expense management efforts to reduce our cost to income ratio.
Banking and Investment Activities
Net revenues from banking and investment activities totalled $31.4 billion for the June 2023 quarter, which increased by 18% or $4.9 billion over the prior quarter. The improved performance was mainly attributable to gains from foreign exchange and investment activities, which included fair value gains from equity investments, increasing by 162% or $3.9 billion over the March 2023 quarter. During the quarter, net fee and commission income benefitted from the continued growth in our loan portfolio coupled with increased card transaction volumes, reflecting an increase of $793 million or 12% over the March 2023 quarter. Net interest income increased marginally by 1%, also due to portfolio growth and improved net margins for loans and investment securities. These increases were partially offset by a 7% increase in credit impairment provisions; the quarterly performance continues to reflect normal expected credit losses based on the portfolio composition and size.
Insurance Activities
Net revenues from insurance activities for the June 2023 quarter totalled $4.2 billion, a 16% or $813 million decline from the March 2023 quarter. The segment recorded marginal improvement in net underwriting income; however, this was eroded by increased net insurance costs. Our insurance business experienced higher net claims mainly from our Life, Health and Pensions segment. The increased claims were primarily in relation to health and some additional general insurance claims.
Operating Expenses
Operating expenses for the June quarter totalled $27.5 billion, increasing by $2.4 billion or 10% over the March 2023 quarter. The main factor in the June quarter's lower staff costs was the inclusion of additional incentive payments in the March 2023 quarter. In contrast, professional fees increased in the current quarter. The increase in the cost to income ratio over the past few years is unacceptable and steps have been, and will continue to be taken to quickly and materially reduce this ratio going into the next fiscal year.
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National Commercial Bank Jamaica Limited | Clarien Group Limited | Guardian Holdings Limited | TFOB (2021) Limited
Financial Results | 3 |
For The Nine Months Ended June 30, 2023 |
Net Profit of $9.7 billion (attributable to stockholders of the parent)
Consolidated Statement of Financial Position
Total assets at June 2023 was $2.22 trillion, an increase of 10% or $206.0 billion over the prior year. The growth in the asset base was mainly due to increased loans and investment securities. The growth was primarily funded by increased obligations under securitisation arrangements, repurchase agreements, deposits, liabilities under annuity and insurance contracts and other borrowed funds.
Investment Securities and Reverse Repurchase Agreements
Investment securities, including pledged assets and reverse repurchase agreements, totalled $1.12 trillion, an increase of 19% or $181.5 billion over the prior year. The increase was due to improving asset prices, portfolio growth and the expansion of the Hold to Collect business model in our Jamaican bank.
Loans and Advances
The Group's loans and advances, net of credit impairment losses, totalled $604.6 billion, an increase of 8% or $45.9 billion over the prior year. Non-performing loans totalled $24.9 billion as at June 30, 2023, declining by $5.5 billion or 18% from the prior year. The reduction in non-performing loans led to an improvement in our non-performing loan ratio, decreasing to 4.0%, from 5.3% in the prior year.
Deposits
Banking customers' continued confidence in the Group is demonstrated by a 4% or $26.9 billion increase in deposits, to $739.1 billion, which is our main source of funding.
Policyholders' Liabilities
Liabilities under annuity and insurance contracts increased to $465.3 billion, up 5% or $21.3 billion over the prior year.
Capital and Liquidity
Equity attributable to stockholders of the parent totalled $183.9 billion, an increase of $37.3 billion or 25% over the prior year, improving due to retained earnings and lower unrealised fair value losses.
All our regulated entities continue to meet the applicable capital and liquidity regulatory requirements.
Dividends
The Board of Directors, at its meeting on August 9, 2023, decided not to pay an interim dividend. Conserving capital is prudent to ensure the organisation is most resilient in a world of change. However, the continued absence of dividends to our shareholders is not aligned with our commitment to fulfilling the needs of all our stakeholders. Through an intense focus on operating efficiency and capital efficiency, as well as other strategies, we intend to return to the pattern of regular
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National Commercial Bank Jamaica Limited | Clarien Group Limited | Guardian Holdings Limited | TFOB (2021) Limited
Unaudited Financial Results
Consolidated Income Statement
Nine Months Ended June 30, 2023
(expressed in Jamaican dollars unless otherwise indicated)
CURRENT YEAR | PRIOR YEAR | ||||||||||||
Quarter ended | Quarter ended | Year to date | Quarter ended | Year to date | |||||||||
June 30 | March 31 | June 30 | June 30 | June 30 | |||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | |||||||||
Operating income | |||||||||||||
Banking and investment activities | |||||||||||||
Interest income | 27,419,715 | 26,100,776 | 79,402,197 | 23,069,529 | 67,582,436 | ||||||||
Interest expense | (9,934,129) | (8,753,641) | (27,531,699) | (6,885,639) | (19,016,000) | ||||||||
Net interest income | 17,485,586 | 17,347,135 | 51,870,498 | 16,183,890 | 48,566,436 | ||||||||
Fee and commission income | 10,361,295 | 9,664,413 | 29,485,016 | 8,546,236 | 25,730,183 | ||||||||
Fee and commission expense | (2,823,374) | (2,919,413) | (8,207,419) | (2,355,113) | (6,584,692) | ||||||||
Net fee and commission income | 7,537,921 | 6,745,000 | 21,277,597 | 6,191,123 | 19,145,491 | ||||||||
Gain on foreign currency and investment activities | 6,314,505 | 2,410,543 | 10,860,478 | 1,621,000 | 7,022,660 | ||||||||
Credit impairment losses | (1,533,557) | (1,427,541) | (4,788,675) | 429,111 | (1,868,676) | ||||||||
Dividend income | 701,793 | 488,019 | 2,039,155 | 657,163 | 2,023,044 | ||||||||
Other operating income | 873,275 | 957,177 | 3,628,882 | 1,647,087 | 5,251,292 | ||||||||
6,356,016 | 2,428,198 | 11,739,840 | 4,354,361 | 12,428,320 | |||||||||
Net revenues from banking and investment activities | 31,379,523 | 26,520,333 | 84,887,935 | 26,729,374 | 80,140,247 | ||||||||
Insurance activities | |||||||||||||
Premium income | 42,459,753 | 41,022,772 | 125,127,273 | 37,002,118 | 121,055,810 | ||||||||
Insurance premium ceded to insurers | (14,843,448) | (13,268,940) | (42,446,735) | (13,428,899) | (39,642,783) | ||||||||
Reinsurance commission income | 3,584,108 | 2,611,289 | 9,019,268 | 3,301,328 | 9,010,756 | ||||||||
Net underwriting income | 31,200,413 | 30,365,121 | 91,699,806 | 26,874,547 | 90,423,783 | ||||||||
Net insurance benefits and claims | (22,679,387) | (20,818,162) | (65,706,686) | (13,462,333) | (52,360,216) | ||||||||
Commission and other selling expenses | (4,296,892) | (4,509,801) | (14,072,249) | (3,859,528) | (12,585,059) | ||||||||
Net revenues from insurance activities | 4,224,134 | 5,037,158 | 11,920,871 | 9,552,686 | 25,478,508 | ||||||||
Net operating income | 35,603,657 | 31,557,491 | 96,808,806 | 36,282,060 | 105,618,755 | ||||||||
Operating expenses | |||||||||||||
Staff costs | 13,100,977 | 14,201,858 | 40,334,234 | 12,961,578 | 37,520,582 | ||||||||
Depreciation and amortisation | 2,224,661 | 2,193,563 | 5,633,325 | 1,360,447 | 6,208,611 | ||||||||
Finance cost | 513,496 | 553,376 | 1,633,850 | 582,693 | 1,532,420 | ||||||||
Other operating expenses | 11,676,559 | 8,160,709 | 31,302,544 | 10,612,494 | 31,985,956 | ||||||||
27,515,693 | 25,109,506 | 78,903,953 | 25,517,212 | 77,247,569 | |||||||||
Operating profit | 8,087,964 | 6,447,985 | 17,904,853 | 10,764,848 | 28,371,186 | ||||||||
Share of profit/(loss) of associates | 75,872 | 166,060 | 232,809 | 154,332 | 642,741 | ||||||||
Profit before taxation | 8,163,836 | 6,614,045 | 18,137,662 | 10,919,180 | 29,013,927 | ||||||||
Taxation | (776,290) | (1,630,023) | (4,411,613) | (325,042) | (3,134,310) | ||||||||
NET PROFIT | 7,387,546 | 4,984,022 | 13,726,049 | 10,594,138 | 25,879,617 | ||||||||
Attributable to: | |||||||||||||
Stockholders of parent | 5,481,754 | 3,391,449 | 9,708,994 | 8,208,253 | 18,642,766 | ||||||||
Non-controlling interest | 1,905,792 | 1,592,573 | 4,017,055 | 2,385,885 | 7,236,851 | ||||||||
7,387,546 | 4,984,022 | 13,726,049 | 10,594,138 | 25,879,617 | |||||||||
Earnings per stock unit | 2.38 | 1.48 | 4.22 | 3.57 | 8.11 | ||||||||
Basic and diluted (expressed in $) | |||||||||||||
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National Commercial Bank Jamaica Limited | | Clarien Group Limited | | Guardian Holdings Limited | TFOB (2021) Limited |
5
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NCB Financial Group Ltd. published this content on 10 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 12:48:08 UTC.