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Financial Results for Q/E June 30, 2005
The Board of Directors has released the following un-audited results for the Group for the for the quarter and nine months ended June 30 2005.
The Group's profit before tax of $3.7 billion for the nine months ended 30 June 2005 was ahead of the
corresponding nine months of the prior period by $231.5 million or 7%. However, the tax charge for
the current nine months increased by $491 million or 83% due to an adjustment for the under-accrual
of the prior year's tax charge, as well as reflecting an increase in the Group's effective tax rate as a
result of a change in the composition of the Group's assets in comparison to the prior period. The year
to date net profit for the Group was $2.6 billion compared to $2.9 billion for the corresponding period of
the previous year, a decrease of $259.5 million, or 9%. Operating income (revenue minus interest expense)
for the nine months was $11.7 billion, an increase of $1.7 billion or 17% when compared to the same period last year.
The results for the current financial year to date include a full provision for the impairment of the investment
in Dyoll Group Limited of $536 million which was reported in the March 2005 quarter. Staff costs for the
nine months ended 30 June 2005 increased by $759.3 million or 23% compared to the same period of the
previous year, due mainly to redundancies, increases in salaries and allowances, as well as provisions for other benefits.
PERFORMANCE AT A GLANCE
REVENUES
LOAN PORTFOLIO
The aggregate amount of non-performing loans amounted to $1.49 billion compared to $1.47 billion as at 30 September 2004. Provision for credit losses for the nine months to date is $60.9 million compared to $307.7 million for the corresponding period of the prior year, a decrease of 80%.
As at 30 June 2005 the accumulated provision for credit losses of $2.19 billion represented an overall coverage of 147% of non-performing loans. Provisions for credit losses that exceed the amounts required by International Financial Reporting Standards (IFRS) are credited to a non-distributable Loan Loss Reserve. As at 30 June 2005 the balance in the Loan Loss Reserve was $209.8 million. The Bank's provisioning policy is in compliance with the Bank of Jamaica regulations.
BALANCE SHEET
The growth in the asset base over the nine month period was mainly funded as follows:
CAPITAL
DIVIDENDS
BASIS OF PREPARATION
As at 1 October 2004, the bank has adopted IFRS 3 (Business Combinations). This has resulted in the transfer of the negative goodwill arising on acquisition of associates to retained earnings. Positive goodwill is assessed annually for impairment and is no longer amortised.
One of the bank's subsidiaries, NCB Insurance Company Limited, has not opted for the early adoption of IFRS 4 (Insurance Contracts). The results as at 30 June 2005 do not incorporate any adjustment that would arise from such adoption.
Where necessary, comparative figures have been reclassified to conform with changes in presentation in the current period.
All amounts are stated in Jamaican dollars unless otherwise indicated
COMMUNITY RELATIONS
In June, NCB recommitted its ardent support of the JMA's 'Buy Jamaican, Build Jamaica' campaign. The programme aims to promote the usage and raise the awareness of products which are produced locally.
The latest strategies in wealth creation were shared with people from the communities of Portmore, Old Harbour and Spanish Town at the Portmore Financial Forum which was held at the new Portmore Branch in May. Over 300 customers and guests benefited from presentations made by the Chairman and other senior NCB executives.
While our support for the private sector was our major focus for the period, our support for the youth, arts and communities remained strong. NCB renewed its commitment to promoting excellence in our youth by sponsoring the Boys and Girls High School Relays, at the Jamaica International Invitational Meet, at a cost of US$20,000. In June, Annotto Bay's Police Station was reopened after receiving extensive renovation from a coalition of corporate entities, including NCB.
In order to maintain visibility and demonstrate our support of our customers, NCB participated in a number of activities and events during the period including: Children's Expo, Portmore Week, Education Expo, the Jamaica Employee Federation Conference and the Home and Hardware Expo that was held in Kingston.
Through its community relations activities, NCB continues to play its role in 'building a better Jamaica'.
See the full statements.
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