NET PROFIT at National Commercial Bank increased 1 per cent to $815 million in the nine months ended July 30, 2002 over the same period the year before, according to an NCB release.
But operating profit at the bank stood at $931 million for the nine months ending in July. The unaudited results showed operating profit fell 27 per cent from $1.2 billion in the same period in the prior year.
A $400 million exceptional item in the 2001 depressed profits for the nine-month period that year. That exceptional item, which occurred in the third quarter, was based on the cost of the change in the bank's portfolio of the switch from FINSAC bonds to Local Registered Stock (LRS).
Net profit in the bank for the quarter ended June 30 of this year was $430 million, compared to $217 million in the previous quarter and $146 million for the same period in the previous year. As with the nine-month period, the comparison of the June quarter this year with the similar quarter last year is also affected by the $400 million exceptional item.
The bank had a $497 million operating profit in the 2002 June quarter, compared with a $502 million operating profit in the June quarter of 2001. This represents a 1 per cent decrease in earnings.
Revenues increased 5 per cent to $11.4 billion, in the nine months to June, compared with the same period the year before. The bank stated that this increase was "notwithstanding lower yields on the $46 billion LRS portfolio which replaced FINSAC bonds in the bank after monetisation."
Expenses were 9 per cent higher for the nine months ended in June, the bank stated. It said this was "mainly due to the release of a Bad Debt Provision of $784 million in the previous year." Loan volume increased over 79 per cent, compared with the previous year for the nine-month period.
The directors approved the payment of dividends on a quarterly basis, and as a result, the statement said an interim dividend payment of five cents per stock unit will be paid on August 26, 2002 to stockholders on register at August 12, 2002.
Standard and Poor's have announced that the purchase by AIC of FINSAC shareholding in the bank and monetisation of FINSAC bonds, substantially improved the quality of the balance sheet. Thus NCB's local and foreign currency ratings have been upgraded from 'B' to 'B+' and its generic survivability assessment to 'BB+'.
