NCBFG Announces FY23 Earnings and Path to Sustainability

NCBFG Announces FY23 Earnings and Path to Sustainability

NCB Financial Group Limited (NCBFG) released its unaudited financial results for the year ended September 30, 2023, which the Group says reflected a period of significant transformation and renewed commitment to its stakeholders.

A consolidated net profit of $15.3 billion was reported, representing a 56% or $19.8 billion decline from the prior year. The dip in profits was largely attributed to non-recurring costs, notably separation arrangements. Interim Group CEO, Robert Almeida , presented a perspective on the FY24 outlook that excludes these one-off costs and reflects recent cost optimisation endeavours which will net around $8 billion in annual savings. The normalised outlook indicates a potential run rate closer to a $20 billion mark in unaudited consolidated net profits.

During the recent Investor Briefing on the Group's financial performance, the Interim CEO expressed that the period of complex restructuring has been no small feat. According to Almeida, "While our 2023 financial performance appears distant from our targets, it is essential to remember that we were executing a significant renovation in 2023, incurring expenses while realising none of the benefits of our cost optimisation measures. Adjusting for non-recurring items, we believe we entered fiscal year 2024 in a good position to meet and exceed targets necessary for a sustainable, resilient, growing and dividend paying business,” he said, in assuring stakeholders that they can be optimistic about the organisation’s future state.

Positive Performance Indicators

Malcolm Sadler, Chief Financial Officer, NCBFG pointed to some positive performance indicators in his presentation. The Group reported a 9% increase in Total Revenues which grew by $29 billion to end the year at $348 billion. Growth was recorded in all the main earning portfolios, driven primarily by increases in net loans and investment securities, which grew by 6% and 15%, respectively. Reflecting continued confidence in the brand, Customer Deposits increased by $32.6 billion, ending the year at $747 billion, a 5% increase over the prior year, while Policyholder Liabilities and insurance contracts grew to $459.5 billion which was an $18.1 billion increase over the prior year. Additionally, Sadler outlined that the Group’s asset base stands at $2.23 trillion, an increase of $147.1 billion or 7% over the prior year.

Sustainable Growth & Success

Despite navigating various challenges throughout the last quarter, the Group successfully reached significant milestones in its pursuit of strategic objectives within the Efficiency, Governance, and Customer Experience (EGC) framework. In looking forward, Chairman, Michael Lee-Chin said that “The cumulative effect of the activities undertaken, particularly in the last quarter, has positioned NCB Financial Group for sustained growth and success. The core of our renovation is now complete, and we are building upon this reset platform. We have achieved significant cost reductions, streamlined our organisation, and renewed our focus on customer experience. Operational excellence is our top priority, with the aim of building a sustainable and growing enterprise that optimally serves all stakeholders.”

The Briefing concluded by placing a strong emphasis on the financial blueprint for the future, highlighting key performance indicators that will serve as guiding metrics for the organisation. These include maintaining strong Capital Management ratios, achieving Return on Equity in the mid to high teens, striving for a Dividend Payout Ratio of around 50%, and lowering the Cost-to-Income ratio closer towards a 60% benchmark. Interim CEO, Robert Almeida closed by stating that “A financial institution with these metrics is not only economically attractive, but would have lots of shock absorbers to deal with extreme and fluctuating conditions. In other words, NCBFG is and will continue remain resilient.”

The audited financial statements for the financial year ended September 30, 2023, will be made available at a later date.


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