The Board of Directors is pleased to release the following un-audited results for National Commercial Bank Jamaica Limited (NCBJ) and its subsidiaries for the nine months ended 30 June 2010.

PERFORMANCE HIGHLIGHTS

Nine Months ended June 2010 compared with Nine Months ended June 2009

• Net Profit of $8.08 billion, grew by $742 million or 10.1%.
• Earnings per Stock Unit of $3.28 grew by $0.30 or 10.1%.
• Operating Revenue of $21.73 billion, increased by 9.7% or $1.92 billion.
• Cost to Income Ratio increased to 52.1% from 48.9%.
• Risk-Based Capital Adequacy Ratio improved to 17.0% from 13.7%.
• Total Assets of $322.41 billion, increased by 3.8% or $11.90 billion.
• Net Loans of $85.11 billion, fell by 4.4% or $3.88 billion.
• Investment Securities of $187.78 billion, up by $28.57 billion or 17.9%.
• Customer Deposits of $138.25 billion, increased by 4.1% or $5.49 billion.
• Return on Average Equity declined to 24.7% from 28.8%.
• Return on Average Assets increased to 3.4% from 3.3%.

Quarter ended June 2010 compared with Quarter ended March 2010

• Net Profit of $2.76 billion, declined by 7.9% or $203 million.
• Earnings per Stock Unit of $1.12 increased by $0.09 or 7.9%.
• Operating Revenue decreased by $40 million or 0.6%.
• Operating Expenses decreased by $433 million or 10.4%.
• Return on Average Equity increased to 24.1% from 23.5%.
• Return on Average Assets increased to 3.4% from 3.2%.
• Cost to Income Ratio decreased to 50.2% from 55.7%.

We continue to report strong financial performance while building our capital and growing our balance sheet. This overall improvement has further strengthened our group and our capital ratios far exceed the minimum regulatory requirements. The diverse products and services offered by our group allow us to meet the varied needs of our customers despite the challenges in the business environment.

SEGMENT PERFORMANCE

Banking
The Retail, Corporate and Treasury units of the banking segment reported combined operating results of $6.28 billion for the nine months ended 30 June 2010; this represents a decrease of $823 million from the prior June 2009 period.

Loans and advances, which totalled $85.1 billion (net of provision for credit losses) as at 30 June 2010 declined by $3.9 billion from the loan portfolio as at 30 June 2009.

This reduction is due to a reduction in the rate of loan growth as well as the effect of the appreciation of Jamaican dollar during the quarter; over 50% of NCB’s loan portfolio is denominated in US dollars.

Nonperforming loans totalled $3.0 billion as at June 2010 ($2.2 billion as at June 2009) and represented 3.4% of the gross loans compared to 2.4% as at 30 June 2009.

Our provision coverage as at June 2010 was 139.3% compared to 152.0% at June 2009.

NCBJ remains the largest commercial bank when measured by profit, assets, branch network and capital base..

Wealth Management
Our wealth and asset management segment contributed operating profits of $2.63 billion for the nine months ended 30 June 2010 and the result for this segment reflects a $1.3 billion or 100.7% increase over the prior June 2009 period. The significant growth over the prior year’s results is due to two main factors:

• increase in net interest income, and
• non-recurrence of mark to market losses from trading activities undertaken in the prior year.

Insurance
Our insurance segment contributed operating profits of $1.47 billion for the nine months ended 30 June 2010, representing an increase of 1.6% or $23 million over the prior year’s nine month results. NCB Insurance Company Limited (NCBIC) achieved a net profit of $1.23 billion, increasing by $74 million when compared to 30 June 2009.

CAPITAL
The Group’s Stockholders’ Equity of $46.4 billion increased by $9.7 billion or 26.4% when compared to 30 June 2009.

• The Risk-Based Capital Ratio for NCBJ was 17.0% which exceeds the minimum requirement of 10% stipulated by the Bank of Jamaica (30 June 2009 – 13.7%).

• The Capital to Risk Weighted Assets Ratio for NCBCM was 62.0% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (30 June 2009 – 58.3%).

• The Solvency Ratio for NCBIC was 24.8% which exceeds the minimum requirement of 10% stipulated by the Financial Services Commission (30 June 2009 – 19.6%).

DIVIDENDS
On 22 April 2010, the Board declared an interim dividend of $0.40 per ordinary stock unit. The dividend is payable on 20 August 2010 for stockholders on record as at 09 August 2010.

BUSINESS INITIATIVES
In a move to signify our deepening commitment to spur the growth of the nation’s productive sector, we extended the tenure of two products which offer loans at only 9% to the nation’s SME sector.

“Our mission of building a better Jamaica can only be strengthened by helping to create a productive Jamaica and to play our part in creating an environment in which economic development and investment can thrive” opined NCB’s Group Managing Director, Patrick Hylton.

The NCB Nation Builder Credit Line offers companies as much as $15 million in financing with 7 years to repay. With the NCB Nation Builder Line, funds will be available to support capital expansion and working capital for start-up companies, businesses owned by women and companies in the agricultural and manufacturing sector.

AWARDS
We are honoured to be named the 2010 recipient of the World Finance Awards Best Banking Group, Jamaica and Most Innovative Bank, Jamaica. This marks the second consecutive award as the World Finance Most Innovative Bank.

“This win speaks directly to the strong performance and agility of the NCB Group; we continue to lead in innovation and consistently soar above environmental challenges earning NCB International recognition and accolades,” stated Dennis Cohen, NCB Deputy Group Managing Director.

The World Finance Awards seek to identify industry leaders, individuals, teams and organizations that represent the benchmark of achievement and best practice in the financial and business world. The World Finance awards panel in its assessment used a wide range of criteria which included innovation, and quality of product, as well as proof of market development and excellence in client representation.

NCB is the only financial institution in Jamaica to win a World Finance award this year (2010).”

COMMUNITY RELATIONS

NCB's philanthropic activities are geared towards empowering individuals to create the change needed in Jamaica today by providing some of the resources required. In pursuit of our objective of Engaging in Nation Building, we focused on education, community development and youth leadership through the N.C.B. Foundation.

Education

We awarded scholarships to this year’s GSAT Top Achievers in the PATH Programme and to the top GSAT students at several primary schools. Assistance was given towards several school infrastructural projects including the G.C. Foster College, Runaway Bay Basic School, Perry Street Basic School and Point Hill Basic School Diagnostic and Reading Centre.

Community Development

In the spirit of staff volunteerism, over 300 NCB Employees joined with community representatives on Labour Day to participate in islandwide Labour Day projects sponsored by NCB. The initiative was comprised of three (3) projects – the painting of the Mandeville Regional Hospital, the restoration of the Morant Bay Bus Park ant he upgrading of the Play and Learn Park at the Ocho Rios Primary School. In recognition of the need to better equip our security forces, we also contributed to crime fighting activities.

Youth Leadership & Entrepreneurism

Through our recent ‘Be the Change’ campaign we continue to engage and inspire our nation’s youth to become agents of change within their schools and communities. We were involved in various youth empowerment programmes including the Kiwanis Club of New Kingston’s Youth in Excellence project which seeks to promote the adoption of social, business and professional standards among young individuals. We also sponsored the Jamaica Manufacturers Association’s Tertiary Entrepreneurship Challenge which is geared towards creating the next generation of successful Jamaican entrepreneurs.

NCB continues to reach beyond the boundaries of financial services as we commit to not only doing well but doing good. We wish to express our deep appreciation to our staff members for our enthusiastic involvement in community activities.

To our customers, we say thank you for your continued loyalty, confidence and support; together, We Make It Happen.