NCB Financial makes $5b profit

NCB Financial Group Limited reported a profit of $5.15 billion for the October-December 2024 quarter on the back of $35.2 billion in revenue compared to $31.3 billion a year earlier.

The profit achieved by the financial conglomerate, which owns National Commercial Bank Jamaica Limited and insurance group Guardian Holdings Limited, improved by three-quarters year on year, but once adjusted for movements in currency and investments, it resulted in a comprehensive loss.

The comprehensive loss reflected changes in value not captured in the profit and loss, inclusive of $3 billion worth of currency losses, $5 billion in unrealised losses on its securities, and a gain of $2 billion in its insurance reserves.

The loan book dipped to $616 billion from $626 billion three months prior in September but improved relative to its $603 billion value in December 2023. The group’s non-performing loans were flat at $25.8 billion in the December quarter, but the exact figure for loans written off in the period was not disclosed.

For the year ending September 2024, however, those write-offs doubled to $6.5 billion, primarily in payment services, corporate, and commercial banking. Unsecured loans and credit cards are first to get written off, explained Chief Financial Officer Malcolm Sadler at NCB Financial’s annual general meeting last Thursday.

“To the extent that you are incurring impairment losses on cards, those flow through quickly to the write-offs. It doesn’t mean that we will not recover,” said Sadler. “It is not a forgiveness of the debt. We expect to recover a portion of it, if not all of it.”

National Commercial Bank CEO Bruce Bowen said the increase in write-offs was primarily because of rising interest rates.

“There was pressure on consumer credit, and we saw that flowing through,” Bowen said at the meeting.

The central bank executed a series of rate hikes, from a low of 0.5 per cent to a peak of 7.0 per cent, to tame pandemic-related inflation, but began rolling back some of those hikes last year.

The policy rate, which sets the tone for the market, is now at 6.0 per cent.

Bowen said that since the rates started falling, write-offs have “normalised”.

steven.jackson@gleanerjm.com