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Profit dips, asset base expands at NCB

Published:Friday | November 13, 2015 | 3:03 PMTameka Gordon

National Commercial Bank Jamaica (NCB) has reported a slight dip in net profit by $25 million to close the year at $12.3 billion.

However, the nation's largest commercial bank, led by managing director Patrick Hylton, cemented its pole position with five per cent growth in assets to $524 billion at yearend September 2015.

Based on these results, NCB will pay out its most generous dividend so far this year totalling $2.1 billion, or 85 cents per share, to its more than 35,000 shareholders on December 11.

A third of the growth in assets was reflected in the bank's loan book, which expanded by just under $8 billion to $165 billion.

Additionally, its customers parked more funds with NCB, whose deposit based climbed by $26 billion to $228 billion.

"This was driven by growth in our savings, current accounts and fixed deposit portfolios, which increased by 15 per cent, 11 per cent and 8.9 per cent, respectively, over the year," the bank said in its report to shareholders on Friday.

As it pushes for regional expansion, the bank's wealth subsidiary landed a securities dealer licence in Barbados eight days ahead of the close of its financial year, enabling the new NCB Capital Markets (Barbados) Limited to launch into business.

Located at Christ Church, the newest subsidiary "is our investment banking hub for the eastern Caribbean," the bank said, noting its strategy to grow revenues through regional expansion.

The move followed on the heels of the opening of the NCB Banking and Financial Centre in Kingston, into which the bank collapsed its two Manor Park operations and transferred its well-to-do private banking clients. The centre also offers 'Bank on the Go' facilities, and insurance and capital markets services.

The company's operating expenses increased by seven per cent, or $21 billion, for the period under review due, largely to asset tax charges, marketing, and advertising costs, professional service fees, among others.

Segment reporting saw the treasury and correspondent banking operations continuing its lead performance in operating profit of $4.8 billion, a 26 per cent increase year-on-year. The segment contributed 27 per cent to overall segment operating profits.

The improvements of the segment were linked primarily to "higher gains on foreign currency and investment activities."

The financial house further saw increases of operating profits from its retail and SME, corporate banking, life insurance and pension fund management, and general insurance segments.

Operating profit, however, declined for the wealth, asset management and investment, payment services.