Bank of the Year Jamaica: National Commercial Bank
October 31, 2019
Buoyed by an expanding loan book and wider range of products, the bank’s improving results reflected better days in its home country
Profits at Kingston-based National Commercial Bank (NCB) continued to climb during the awards period as the bank’s return on equity rose to 20% from 15% in the previous year period.
Net profits stood at JMD$8.8 billion ($65.6 million) at the end of the third fiscal quarter ended in June, compared to JMD$6.9 billion a year earlier. For the first nine months of 2019, profits had risen to JMD$20.7 billion.
The bank’s loan portfolio climbed 14% in the nine-month period to JMD$411.8 billion. The ratio of non-performers declined to 4.5% from 4.8% a year earlier. The expanded loan portfolio contributed to a 27% increase in net interest income to JMD$6.9 billion.
The bank’s improving results mirror the turnaround in the Jamaican economy. Credit the economic revival to a bailout from the International Monetary Fund (IMF) and the decision by the government to strictly adhere to IMF conditions.
In November, the Caribbean nation will exit its standby arrangement with the IMF, which expects the country’s GDP will expand 1.7% this year from 1.4% in 2018.
Meanwhile, in May, NCB completed its acquisition of Trinidad and Tobago-based insurer Guardian Holdings Ltd. (GHL).
Under the deal, NCB paid $207 million for a majority stake in the company, boosting its share to almost 62% from about 30%.
The deal allows NCB to offer a wider range of financial products and makes it one of the Caribbean’s largest financial groups. Income from insurance more than doubled in the nine months ended in June to JMD$5 billion. GHL contributed 45% of net insurance revenues for the third quarter.