November 30, 2021
Net Interest Income decreased by 7%, relative to 2020, to total $48.63 billion (2020: $52.49 billion). While, for the quarter, net interest income closed at $15.68 billion (2020: $14.85 billion).
Net Fees and Commission Income amounted to $22.49 billion, an increase of 5% on 2020’s $21.37 billion.
Dividend income increased by 22% to a total of $2.32 billion (2020: $1.90 billion). Other Operating Income increased 151% to $5.28 billion (2020: $2.10 billion) while Credit impairment losses decreased 67% to $3.39 billion in contrast to $10.28 billion recorded for 2020. Lastly, the Company’s Gain on foreign currency and investment activities rose 160% to $22.83 billion compared to $8.79 billion reported in 2020.
Consequently, NCBFG’s Net results from Banking and Investment Activities rose by 29% to a total of $98.15 billion (2020: $76.37 billion). NCBFG stated, “during the year, securities’ prices and investment activities improved compared to the prior financial year when prices declined due mainly to the onset of the pandemic in the Caribbean. The favourable price movements resulted in increased gains from the sale of debt securities and mark to market valuations. Credit impairment provisions continued to benefit from the improving environment and more positive economic outlook relative to the previous financial year coupled with improving scenarios no longer significantly weighted to the worse case. Credit impairment losses declined by $6.9 billion or 67% from the prior year, reflecting the expected economic recovery in a number of sectors.”
Net results from insurance activities for the year decreased 29% to $22.95 billion (2020: $32.46 billion). NCBFG stated that, “this resulted from reduced activities due to COVID-19 restrictions and lockdowns in Trinidad and Tobago during the financial year.” Of this, Insurance premium income rose 11% to $150.04 billion (2020: $135.20 billion), while reinsurance commission income advanced 37% to $11.57 billion (2020:$ 8.47 billion). Insurance premium ceded to insurers and policyholders and annuitants benefits and reserves amounted to $51.38 billion (2020: $42 billion) and $77.28 billion (2020: $63.22 billion) respectively. Commission and other selling expenses increased to $16.71 billion compared to $13.01 billion in 2020.
Total Operating Expenses for the year amounted to $94.85 billion, an increase of 16% compared to the $81.57 billion reported for the year ended September 30, 2020. Of these expenses:
- Staff costs increased 10% to $44.50 billion relative to $40.53 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 Management.
- Other operating expenses grew by 26% to $39.20 billion (2020: $31.10 billion). NCBFG noted that, “During the year, significant investments in technology and digital channel enhancements were made to transform our business to a more customer centric, digitally enabled business. Increased technical, consultancy and professional fees as well as infrastructure maintenance costs were associated with these investments.”
- Depreciation and amortization grew 9% to $9.31 billion (2020: $8.52 billion).
- Finance Cost grew 30% to $1.84 billion (2020: $1.42 billion).
Consequently, operating profit decreased 4% to total $26.26 billion (2020: $27.26 billion).
‘Share of profit of associate’ amounted to $340.29 million, down from 2020’s $312.39 million.
Consequently, profit before taxation decreased 4% to $26.60 billion relative to $27.57 billion in 2020. Following tax charge of $6.52 billion (2020: tax charge of $690.06 million), year-end net profit totalled $20.08 billion, a 25% decline when compared to $26.88 billion for the corresponding period of 2020. Net profit for the quarter closed at $6.16 billion (2020: $6.58 billion), a 6% decrease.
Net profit attributable to shareholders closed at $14.23 billion for the year relative to $19.09 billion in 2020. Net profit attributable to shareholders for the quarter amounted to $4.32 billion (2020: $4.31 billion).
Earnings per share (EPS) for the year totalled $5.77 relative to $7.74 booked for the comparable period of 2020. The EPS for the fourth quarter amounted to $1.75 (2020: $1.75). 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 $119.94 on November 11, 2021 with a corresponding P/E of 20.80 times.
Balance Sheet at a glance:
Total Assets increased to $1.92 trillion as at September 30, 2021 from $1.80 trillion a year ago. This increase stemmed mainly from the growth in ‘Investment securities’ and Loan and advances, net of credit impairment losses’ which closed at $683.86 billion (2020: $456.80 billion) and $523.49 billion (2020: $452.95 billion), respectively.
‘Equity attributable to shareholders of the parent’ as at September 30, 2021 stood at $161.46 billion relative to $156.11 billion a year ago. This resulted in book value per share of $65.45 (2020: $63.29).
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.