Net profit for the nine months ended 30 June 2007 was $4.88 billion, which represents an increase of $974 million or 25% compared to $3.91 billion for the corresponding period ended 30 June 2006. The net profit of $1.76 billion for the third quarter increased by $145 million or 9% compared to the second quarter of 2007 and $211 million or 14% compared to the similar period of 2006.

Earnings per ordinary stock unit for the nine month period was $1.98, compared to $1.59 for the same period last year.

Return on average shareholders equity for the nine months was 24.85%, up from 23.70% for the comparative prior year period.

OPERATING REVENUE

Total revenue for the nine months was $25 billion, representing an increase of $3.14 billion or 14%, when compared to $21.86 billion for the corresponding period of 2006. The banking segment contributed 69% of the overall revenue of the Group, while the Wealth Management and other segments contributed 23% and 8% respectively.

The major revenue highlights for the nine months were as follows:

• Net interest income increased by $616 million or 7% due mainly to the continued growth in the loan and investment portfolios and expert management of our funding costs.
• Net fee and commission income increased by $404 million or 17% which was mainly attributable to growth in card and other retail banking related fees.
• Net trading income, which includes foreign exchange gains, fixed income and equity trading, increased by $715 million or 42%.
• Other operating income increased by $521 million over the prior year due mainly to annuity premiums earned by the insurance segment since the introduction of this product in September 2006.

OPERATING EXPENSES

Operating expenses (excluding interest and fee and commission expense) for the nine months totalled $9.14 billion, $962 million or 12% above the comparative prior year period. Staff costs increased by $652 million or 14% mainly due to negotiated salary and allowances for the current financial year. Actuarial reserves in relation to policyholders' liabilities in the insurance segment, reflected an overall increase of $275 million.

ASSET BASE

Total assets as at 30 June 2007 stood at $243.86 billion, reflecting an increase of $28.91 billion or 13%, compared to 30 June 2006. Investment securities and loans and advances accounted for the increase in assets with growth of $27.35 billion or 24% and $10.79 billion or 26% respectively. Reverse repurchase agreements declined by $8.65 billion or 39%. The growth in assets was mainly funded by increases in customer deposits of $16.56 billion or 18%, securitisation arrangements of $6.40 billion or 40% and policyholders' liabilities of $2.99 billion or 27%.

LOAN PORTFOLIO

The banking segment's continued focus on the loan portfolio has resulted in significant growth during the current financial year. Loans and advances, net of provision, totalled $52.70 billion as at 30 June 2007 compared to $41.92 billion as at 30 June 2006. The aggregate amount of non-performing loans amounted to $1.47 billion and represented 2.72% of the gross loans compared to 3.66% as at 30 September 2006 and 3.9% as at 30 June 2006.

As at 30 June 2007 the accumulated provision for credit losses determined under Bank of Jamaica regulatory requirements of $2.13 billion, represented an overall coverage of 145% 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 2007 the balance in the Loan Loss Reserve was $168 million. The Bank’s provisioning policy is in compliance with Bank of Jamaica regulations.

CAPITAL

The Group’s total stockholders’ equity as at 30 June 2007 was $27.81 billion, an increase of $5.05 billion or 22% when compared to 30 June 2006, and this increase can be mainly attributed to the continued increase in the Group’s earnings. As at 30 June 2007, the Risk-Based Capital Ratio was 15.29% which exceeds the minimum requirement of 10% set by the Bank of Jamaica.

DIVIDENDS

The Bank made three dividend payments totalling $0.64 per ordinary stock unit for the nine months ended 30 June 2007 (30 June 2006 - $0.57, four payments). At the Board of Directors meeting on 26 July 2007, an interim dividend of $0.09 per ordinary stock unit was declared. The dividend is payable on 28 August 2007 for shareholders on record as at 13 August 2007. The financial statements for the quarter ended 30 June 2007 do not reflect this resolution, which will be accounted for in shareholders' equity as an appropriation of retained earnings in the quarter ending 30 September 2007.

PERFORMANCE AT A GLANCE

	Nine Months Ended June-07	Nine Months Ended June-06
Return on Avg. Equity	24.85%	23.70%
Return on Avg. Total Assets	2.79%	2.57%
Growth in Revenue	14.35%	11.93%
Cost Income Ratio	58.27%	59.82%
Net Asset Value per Share	$11.30	$9.25

COMMUNITY RELATIONS

National Commercial Bank Jamaica Limited throughout the third quarter of the 2007 Financial Year remained relentless in fulfilling its corporate and social responsibilities as a proactive corporate leader. The Bank continued to direct its support towards activities that encourage social and economic development, as part of its long term vision of building a better Jamaica.

Education

The N.C.B. Foundation, through the Jamaican Education Initiative (JEI), concentrated its efforts on empowering young Jamaicans through dedicated support and funding.

On 28 June 2007, the N.C.B. Foundation announced the resumption of its CXC sponsorship programme with revised requirements, under Phase II of the Jamaican Education Initiative (JEI). Under this programme, scores of secondary students throughout the island will once again benefit from financial assistance with their examination fees for two business subjects, Principles of Business and Principles of Accounts.

Additionally, the N.C.B. Foundation contributed funds towards the staging of Optimist International's 2007 Oratorical Contest. Participation included students from Jamaica as well as from neighbouring islands such as Anguilla , Barbados and Antigua and Barbuda.

The N.C.B. Foundation donated eight computers to Jamaica House Basic School which will help to expose children between three to six years to computer literacy . Further a-field in Westmoreland , Rhodes Hall High School received a new computer to enhance the school's homework programme.

Health

NCB recently made a donation of $8.75 million towards the Heart Foundation of Jamaica's initiative to construct an Education and Emergency Cardiac Training Centre for the treatment of cardiovascular disease.

NCB employees in the true spirit of volunteerism, joined hundreds of cancer survivors, family, friends, service clubs and corporate Jamaica teams walking, jogging and running laps in support of the Jamaica Cancer Society's Relay for Life recently.

Community Development

NCB remains focused on supporting strategic initiatives that help to strengthen our communities and transform them into more encouraging areas to live, work and conduct business. Members of the NCB executive and management team gave of their time during the quarter by participating in High School graduation ceremonies islandwide as Guest Speakers delivering inspiring addresses to several young Jamaicans transitioning to higher education and the working world.

NCB thanks its employees and customers for their consistent support as the Bank continues to embrace its commitment to relentlessly practice good corporate citizenship.