“National Commercial Bank Is Structured To Deliver”

Company Profile:

Stock Exchange: Jamaica & Trinidad and Tobago
Company: National Commercial Bank Jamaica Limited

2014 Rank: #8

Chairman: Michael Lee-Chin OJ

Group Managing Director: Patrick Hylton

Address: National Commercial Bank Limited
32 Trafalgar Road,
Kingston 10
Jamaica, W.I.
Telephone: United States, Canada and the English Speaking Caribbean: 1-866-622-3477
United Kingdom: 0-800-032-2973
Website: www.jncb.com

NCB is Jamaica’s largest banking and financial services group, based on consolidated total assets at September 30, 2013. This company provides individual consumers, small and medium-sized enterprises, (SMEs), large corporations and government institutions with a range of financial products and services

Founded more than 175 years ago, NCB provides banking, insurance, investments, structured & trade finance, wealth management, pension fund management, life and general insurance and trust services through more than 40 branches and locations. The company also offers selected transactions such as bill payments, transfers, and enquiries at over 170 automated banking machines (ABMs), online (www.jncb.com) and via telephone banking.

The National Commercial Bank Jamaica Limited trades under the symbol “NCBJ” on the Jamaica
and Trinidad & Tobago Stock Exchanges.

The following edited extract was taken from the company’s 2013 Annual Report to shareholders.

“As has been the case in the past, we have refused to let the headwinds that confronted us during 2013 financial year curb our enthusiasm or optimism for the future. We have risen to the challenge, producing strong growth in our core business segments as was reflected in increases in our loan and funding portfolios. This was despite the fact that our business performance was significantly impacted by a weakened economic climate marked by losses incurred as a result of our participation in the national and private debt exchange programmes, increased operating costs and lower asset yields.

Globally there is a sense of opportunity and much focus remains on approaching the new financial year with pragmatism. I am confident that the skill, agility, resilience and determination that resides in all of us here at the nation’s Bank, will continue to propel us forward so we may meet and conquer these challenges and deliver a stellar performance that surpasses the expectations of both our customers and our shareholders and redounds to the wellbeing of our nation.”

Our Diversified Business Model And Strong Risk Discipline Will Keep Us On A Sustainable Growth Path.

We recorded net profits of $8.5 billion for the financial year ended September 30, 2013, a decline of $1.5 billion or 15% from the previous financial year. The decrease in profitability was as a result of increased operating expenses, lower asset yields, and losses incurred on debt exchange transactions.

Operating income, the sum of net interest income and non-interest income, was $38.0 billion for the 2013 financial year, an increase of $3.4 billion, or 10%, over the 2012 financial year.

For the financial year ended September 30, 2013, net interest income of $23.6 billion, grew by $1.8 billion, or 8%, compared to the financial year ended September 30, 2012, mainly as a result of increased interest income from loans.

Net interest income represented 62% of operating income for the 2013 financial year, compared with 63% for the 2012 financial year. Non-interest income of $14.4 billion for the 2013 financial year represented 38% of operating income, compared with $12.8 billion in the 2012 financial year (37% of operating income).

We continue to proactively manage our spreads and net interest margins, while upholding strong risk management practices. We believe our diversified business model and strong risk discipline will keep us on a sustainable growth path.

Operating expenses for the 2013 financial year were $27.8 billion, a $5.5 billion, or 24%, increase over the 2012 financial year. The increase over 2012 reflected inflated operating costs driven by additional revenue sources from the general insurance segment and other costs associated with the postponed initial public offering and initiatives to improve efficiency, productivity and performance management, as well as maintain growth in our core business.

Outlook
We continue to pursue activities aligned to our strategy of being among the top five financial services institutions in the English and Spanish speaking Caribbean. Our focus will continue to be driven by the principle of continuous improvement focused on enhancing the customer experience through the use of technology, deepening customer relationships, improving sales and service productivity and establishing lean principles with an aim to reducing operating expenses through improved efficiencies.BM

Michael Lee-Chin OJ Chairman