The Board of Directors is pleased to release the following un-audited results for National Commercial Bank Jamaica Limited (NCBJ) and its subsidiaries for the six months ended 31 March 2010.

PERFORMANCE HIGHLIGHTS

Half Year ended March 2010 compared with Half Year Ended March 2009

• Net Profit of $5.33 billion, grew by $699 million or 15.1%.
• Earnings per Stock Unit of $2.16 grew by $0.28 or 15.1%.
• Operating Revenue of $14.66 billion, increased by 13.1% or $1.70 billion.
• Cost to Income Ratio increased to 53.1% from 51.7%.
• Risk-Based Capital Adequacy Ratio improved to 15.2% from 13.2%.
• Total Assets of $323.3 billion, increased by 7.1% or $21.5 billion.
• Net Loans of $86.8 billion, fell by 1.5% or $1.3 billion.
• Investment Securities of $181.0 billion, up by $29.5 billion or 19.5%.
• Customer Deposits of $139.5 billion, increased by 7.4% or $9.7 billion.
• Return on Average Equity declined to 24.8% from 29.0%.
• Return on Average Assets increased to 3.3% from 3.1%.

Quarter ended March 2010 compared with Quarter ended December 2009

• Net Profit of $2.55 billion, declined by 7.8% or $217 million.
• Earnings per Stock Unit of $1.03 decreased by $0.10 or 7.8%.
• Operating Revenue decreased by $427 million or 5.7%.
• Return on Average Equity declined to 23.5% from 26.7%.
• Return on Average Assets declined to 3.2% from 3.5%.

SEGMENT PERFORMANCE

Banking
The Retail, Corporate and Treasury units of the banking segment reported combined operating results of $4.28 billion for the six months ended 31 March 2010; this represents a decrease of $376 million from the prior March 2009 period, which was mainly due to the decline in gain on foreign currency and investment activities for the Treasury segment.

The result for Retail Banking declined marginally by 3%, while for Corporate Banking, there was a 17% increase in the segment result.

Loans and advances, which totalled $86.4 billion (net of provision for credit losses) as at 31 March 2010 declined by $1.3 billion from the loan portfolio as at 31 March 2009. Nonperforming loans totalled $2.9 billion as at March 2010 ($2.3 billion as at March 2009) and represented 3.3% of the gross loans compared to 2.6% as at 31 March 2009. Our provision coverage as at March 2010 was 139.7% compared to 148.8% at March 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 $1.82 billion for the six months ended 31 March 2010 and the result for this segment reflects a $1.1 billion or 162.6% increase over the prior March 2009 period. The significant growth over the prior year’s results is due to two main factors:

• improved margins, and
• non-recurrence of mark to market losses from trading activities undertaken in the prior year.

NCB Capital Markets Limited (NCBCM), the main contributor to this segment provided 90.8% of the operating profits.

Insurance
Our insurance segment contributed operating profits of $1.04 billion for the six months ended 31 March 2010, representing an increase of 13.8% or $126 million over the prior year’s six month results. NCB Insurance Company Limited (NCBIC) achieved a net profit of $883.2 million, increasing by $159.0 million when compared to 31 March 2009.

CAPITAL
The Group’s Stockholders’ Equity of $45.0 billion increased by $12.4 billion or 38.1% when compared to 31 March 2009.

• The Risk-Based Capital Ratio for NCBJ was 15.2% which exceeds the minimum requirement of 10% stipulated by the Bank of Jamaica (31 March 2009 – 13.2%).

• The Capital to Risk Weighted Assets Ratio for NCBCM was 61.0% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (31 March 2009 – 55.7%).

• The Solvency Ratio for NCBIC was 26.4% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (31 March 2009 – 17.1%).

DIVIDENDS
On 22 April 2010, the Board declared an interim dividend of $0.61 per ordinary stock unit. The dividend is payable on 20 May 2010 for stockholders on record as at 07 May 2010.

THE JAMAICA DEBT EXCHANGE (JDX)
The JDX was concluded on 24 February 2010 and resulted in the expected reduced yields and longer maturities on our locally issued investment securities. The results for the March 2010 quarter includes approximately one month of securities income at the lower yields.

BUSINESS INITIATIVES
We have partnered with the Ministry of Agriculture and Fisheries in its drive to encourage the growth of the agricultural sector by developing a financing product called the NCB FARM Loan.

In March 2010, we also officially launched our new individual retirement product, the SMART Retirement Plan. The SMART Retirement Plan is a personalized pension plan that provides contributors with a monthly income on retirement and contributions are accumulated tax-free. We believe that this product is ideal for the self-employed, employees of small and medium sized enterprises and individuals who are not contributing to any other approved pension plan.

AWARDS
NCB Insurance Company was awarded the prestigious World Finance’s coveted award for Pension Fund Manager of the Year 2010, Caribbean. According to Hamish Scott, Director- Business Development, World Finance, “The World Finance Pensions Awards judging panel used a wide range of criteria to reach its decision for the 2010 Global Pensions Funds Awards, lending the critical eye of a collective 175 years of business journalism to the exhaustive information gathered by the award body’s research team.

The judges looked for a Company that provided genuinely valuable service, in particular, focus was placed on the financial stability of the Company, enhancements to their core service(s), the approach to risk and corporate governance and the development of their staff.”

COMMUNITY RELATIONS

In pursuit of our objective of Engaging in Nation Building, we focused on education, community development and youth leadership through the N.C.B. Foundation.

Education

During the quarter, we assisted with school infrastructural projects and Airy Castle Primary in St. Thomas was a major beneficiary. In addition, the Foundation in partnership with Logos Hope donated books to students of the Trench Town Primary for their school's library. This partnership was a part of Logos Hope's outreach activities in the Trench Town community.

Community Development

With our continued focus on building communities, assistance was given towards community development initiatives affiliated with non-profit organizations such as the Foundation for the International Self Help (FISH) and the Portland Chamber of Commerce.

Youth Leadership & Entrepreneurism

Our key activity for the quarter in this area was our support to the Ghetto Wise Education Centre. This is a youth-led organization that targets at-risk youth and working adults in communities such as Rollington Town. The Centre, which has an objective of combating issues of illiteracy and poverty within inner city communities, provides persons with IT skills and educational training necessary for the world of work.

In January, NCB employees across the country joined forces and offered tremendous support to assist the people of Haiti who were severely affected by the earthquake that ravaged parts of their country. Together with customers, business partners (supplier base) and key relief agencies, employees of the group made cash and kind donations. Relief Agencies such as Food for the Poor and Red Cross partnered with NCB to ensure that packages were safely delivered to the people of Haiti.

NCB continues to reach beyond the boundaries of financial services as we commit to not only doing well but by also doing good. We wish to express our deep appreciation to our staff members for their enthusiastic involvement in community activities.

To our customers, we say thank you for your continued loyalty, confidence and support; together, We Make It Happen.