HIGHLIGHTS FOR QUARTER ENDED DECEMBER 2003
The Directors are pleased to present the un-audited results of the Group for the quarter ended December 31 2003.

Net profit for the Group for the quarter ended December 31 2003 was J$746.2 million compared to J$481.0 million for the corresponding quarter in the previous year. This positive performance is mainly attributable to a J$1.4 billion increase in net interest income when compared to the corresponding quarter in the previous year.

PERFORMANCE AT A GLANCE

	Dec. 2003	Dec. 2002
Return on Avg. Equity	22.7%	16.0%
Return on Avg. Assets	2.0%	1.6%
Growth in Revenue	56.2%	15.2%
Cost Income Ratio	68.4%	78.6%
Net Asset Value per Share	$5.4	$4.9

REVENUES
Total revenues for the Group increased by J$2.3 billion or 56.2% compared to the corresponding quarter in the previous year. The increase in revenues is attributable to the following.

• Growth in income from loans of J$561 million or 98%.
• Growth in income from securities of J$1.9 billion or 70%.
• Growth in net fees and commissions of J$74.5 million or 23%.

LOAN PORTFOLIO
One of the major revenue drivers for the Group is loans and advances which increased by J$3.7 billion or 14.0% during the quarter. In spite of this significant loan growth the quality of the portfolio has not deteriorated. The aggregate amount of non-performing loans amounted to J$1.56 billion compared to J$1.50 billion as at September 30 2003 and J$1.51 billion at December 31 2002. Non-performing loans now represent 4.9% of gross loans compared to 5.3% at September 2003 and 7.8% as at December 31 2002.

At December 31 2003 provision for credit losses of J$2.1 billion was 134% of non-performing loans compared to 144% as at September 2003. Provisions for credit losses that exceed the amounts required by International Financial Reporting Standards (IFRS) are credited to a non-distributable reserve - Loan Loss Reserve. As at December 31 2003 the balance in the Loan Loss Reserve was J$150.5 million. The Banks provisioning policy is in compliance with the Bank of Jamaica regulations.

BALANCE SHEET

The Group's total assets now stand at J$150.7 billion, J$4.8 billion or 3% in excess of the balance as at September 30 2003. This increase in assets is attributable to growth in the following earning assets:

• Loans and advances - J$3.7 billion
• Reverse repurchase agreements - J$1.5 billion
• Deposits with other banks and the Bank of Jamaica - J$3.9 billion.

CAPITAL
At December 31 2003 total stockholders equity was J$13.4 billion, an increase of J$547 million or 4.3% when compared to the end of the previous financial year. National Commercial Bank is one of the best capitalized banks in Jamaica as evidenced by the international benchmark of capital adequacy, the Risk-based Capital Ratio which was 19.51% at December 31, 2003 (27.41% at December 31, 2002).

DIVIDENDS
At the Board of Directors meeting held 22 January 2004, an interim dividend of 9 cents per share (total cost J$222,008,654.52) was approved for the quarter ended 31 December 2003. The dividend is payable on Monday, 23 February 2004 for shareholders on record as at Friday, 6 February 2004.

BASIS OF PREPARATION
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), and have been prepared under the historical cost convention as modified by the revaluation of available-for-sale investment securities, investment securities held for trading, derivative contracts, investment property and certain fixed assets.

There have been no changes in accounting policies since the most recent annual accounts as at 30 September 2003.