July 30, 2021

Net Interest Income decreased slightly by 1%, relative to the corresponding period in 2020, to total $41.29 billion (2020: $41.57 billion). For the quarter, Net Interest Income improved 5% to close at $14.19 billion (2020: $13.56 billion).  Interest income year to date rose 2% year over year to $61.06 billion compared to $59.67 billion in 2020, while interest expense amounted to $19.76 billion relative to $18.09 billion for the corresponding period in 2020.

Net Fees and Commission Income amounted to $16.86 billion, an increase of 3% on 2020’s $16.37 billion. Net Fees and Commission Income for the quarter amounted to $5.55 billion (2020: $4.94 billion).

The NCBFG also reported a gain on foreign currency and investment activities of $12.29 billion, relative to $2.45 billion booked in 2020. Dividend income decreased by 11% to a total of $1.52 billion (2020: $1.71 billion). Other Operating Income grew by 112% to $3.96 billion (2020: $1.87 billion). Credit impairment losses amounted to $2.18 billion (2020: $5.65 billion) “We continue to closely monitor our portfolio and credit quality ensuring the adequacy of provisions” according to NCBGF. As a result net result from banking and investment activities closed at $73.75 billion (2020: $58.31 billion).  Net result from banking and investment activities for the quarter amounted to $27.16 billion (2020: $18.31 billion).

Net underwriting income closed the period at $81.40 billion, 7% greater than the prior period, this is mainly due to a 10% increase in insurance premium income to $109.43 billion (2020: $99.64 billion). For the quarter, net underwriting income amounted to $25.69 billion (2020: $24.27 billion).

Net results from insurance activities for the period decreased 22% to $18.10 billion (2020: $23.35 billion), this is primarily due to an increase in insurance benefits and claims from $46.83 billion to $55.58 billion in 2021. Net result from insurance activities for the quarter amounted to $4.94 billion (2020: $8.58 billion). NCBFG highlighted that, “COVID-19 control measures imposed by the Government of Trinidad and Tobago impacted businesses and consumers during the quarter creating a general slowdown of business activity, which impacted this business segment.”

Consequently, net operating income increased 12% to a total of $91.85 billion (2020: $81.66 billion). Net operating income for the third quarter recorded a 19% growth to $32.09 billion (2020: $26.90 billion).

Total Operating Expenses for the period amounted to $71.58 billion, an increase of 20% compared to the $59.70 billion reported for the nine months ended June 30, 2020. Expenses for the quarter rose 35% to close at $24.45 billion compared to $18.09 billion in 2020. Of these expenses:

• • Staff costs increased 15% to $34.55 billion relative to $29.93 billion in 2020, “primarily due to the annual increases in salaries, wages and allowances coupled with incentive payments within the current period related to the prior financial year.” as per NCBFG.

• • Other operating expenses grew by 25% to $28.72 billion (2020: $22.92 billion), the Company noted this increase is due to, “due to significant investments in technology and digital channel enhancements; technical, consultancy and professional fees required to support the execution of our transformation strategy; and general increases in expenses.”

• • Finance cost increased to $1.30 billion (2020: $265.60 million), while depreciation and amortization grew by 6% to $7.01 billion (2020: $6.58 billion).

Consequently, operating profit decreased 8% to total $20.28 billion (2020: $21.96 billion). ‘Share of profit of associates’ increased by 22% to total $168.95 million compared to $138.63 million in 2020. For the quarter, operating profit decreased 13% to total $7.65 billion (2020: $8.81 billion). It was noted, “Continued growth from our banking and investment activities led the improved revenue performance, while insurance activities slowed primarily due to the lockdown in Trinidad and Tobago during the third quarter.” as per NCBFG

Consequently, profit before taxation decreased 7% to $20.44 billion relative to $22.10 billion in 2020.

After accounting for taxation of $6.53 billion (2020: $1.80 billion), net profit for the nine months totalled $13.91 billion, a decrease of 31% compared to $20.30 billion for the corresponding period of 2020. Net profit for the quarter amounted to $4.67 billion (2020: $6.94 billion).

Net profit attributable to shareholders closed at $9.91 billion for the nine months relative to $14.78 billion in 2020. Net profit attributable to shareholders for the quarter amounted to $4.02 billion (2020: $5.21 billion).

Total comprehensive income year to date amounted to $14.97 billion (2020: $18.59 billion). While for the quarter, total comprehensive income totaled $5.37 billion (2020: $22.80 billion).

Earnings per share (EPS) for the nine months ended June 30, 2021 totalled $4.02 relative to $5.99 booked for the comparable period of 2020. The EPS for the third quarter amounted to $1.63 (2020: $2.11). The trailing twelve month EPS amounted to $5.76. The number of shares used in our calculations amounted to 2,466,762,828 units. NCBFG stock price closed the trading period at a price of $141.42 on July 29, 2021, with a corresponding P/E of 24.54 times.

NCBFG noted, “Within the context of the economic downturn due to the pandemic, the Group continues to deliver commendable performance as business and consumer activities rebound. The economic outlook continued to improve as markets gradually reopened. During the period, the Group continued its transformation initiatives to accelerate growth and strengthen our position in the industry. This strategy requires significant investments in technology and people to transform into a high performing digital financial services Group.”

Furthermore, “ we have fast-tracked some of our transformation initiatives and continued executing our strategic growth plans, equipping us to grow within the evolving landscape. This positions the Group to achieve its digital ecosystem aspiration while implementing innovative and data-driven solutions to drive and capture value. The resultant business enhancements will enable sustainable value for our employees, customers and shareholders.”

Balance Sheet at a glance:

Total Assets increased by 11% to $1.89 trillion as at June 30, 2021 from $1.69 trillion a year ago.  This increase stemmed mainly from the growth in ‘Investment Securities’ from $454.12 billion in 2020 to $677.63 billion, reflecting a $223.51 billion increase. The movement however was offset by a $166.65 billion decrease in ‘Pledged Assets to $222.17 billion (2020: $388.83 billion).

Shareholder’s Equity as at June 30, 2021 stood at $156.43 billion relative to $151.18 billion a year ago. This resulted in book value per share of $63.41 (2020: $61.29).

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