OT Equity Analysis | Do Not Be Fooled by the Headline: NCBFG’s Core Business Is Growing

Prepared for Our Today | Capital Markets & Investments Desk May 10 2026

NCB Financial Group Limited posted second-quarter results this week that, at first glance, look alarming. Net profit for the quarter ended March 31, 2026 came in at $5.2 billion, against $17 billion recorded in the same period a year earlier. The year-on-year decline is steep enough to trigger concern in even the most seasoned observer. But the headline number is almost entirely a statistical illusion, and investors who stop at the surface read risk misreading one of the region’s most structurally important financial institutions.

The explanation is straightforward. In January 2025, NCBFG completed the sale of Thoma Group, its Netherlands-based insurance brokerage subsidiary, to the UK’s PIB Group. That transaction generated a one-time gain of $15.1 billion that flowed directly into the prior year’s quarterly earnings. Remove that non-recurring item from the comparative period, and the group’s underlying profitability is not only intact but advancing. Strip the disposal gain out entirely, and the March 2025 quarter’s normalised earnings base lands materially below the $5.2 billion recorded in the most recent period. The business, in other words, is ahead of where it was on an organic basis.

Core Operations Are Delivering

What the market should be focused on is the trajectory of the group’s recurring revenue engines. Net interest income for the six months ended March 2026 rose 6 per cent to $41.1 billion, driven by lower funding costs and growth in income from the investment securities portfolio. That is a meaningful result in an environment where regional financial institutions are navigating the aftermath of monetary policy tightening and a more complex credit landscape.

The insurance segment produced perhaps the most striking underlying performance. The group’s insurance service result climbed 58 per cent to $15.1 billion for the half year, aided in part by reinsurance recoveries following Hurricane Melissa. This is a direct reflection of underwriting discipline at Guardian Holdings, and the momentum in the property and casualty business in particular, which expanded 56 per cent in the full year to September 2025, remains well established.

Deposit growth tells a similar story. Deposits expanded 5 per cent year on year to $844 billion at March 2026. This is not a financial group losing the confidence of its customer base. It is one that continues to attract and retain funds at scale across a challenging operating environment.

The balance sheet is arguably in the strongest position it has been in years. Total assets reached $2.43 trillion at March 2026, up 3 per cent from the prior year. Equity attributable to stockholders of the company grew 12 per cent to $203.8 billion.

Cost Discipline Is a Real Story

Beyond revenue, the group has demonstrated credible progress on the cost side. Operating expenses fell 6 per cent to $48.9 billion for the half-year. That is a meaningful decline in absolute terms, not merely a slower rate of growth. For a group of NCBFG’s scale and geographic reach, executing on cost reduction while sustaining investment in core banking infrastructure, cloud migration, and its Centres of Excellence reorganisation is operationally demanding. The full year to September 2025 told the same story. Operating expenses grew just 5 per cent against a 20 per cent increase in operating income, producing a near ten percentage point improvement in the cost-to-income ratio. That compression is continuing into fiscal 2026.

Capital Markets Confidence Is Unambiguous

Institutional investors outside the Caribbean have rendered their own verdict. In July 2025, NCBFG closed a US$225 million Senior Secured Notes offering in the international securities market under Rule 144A of the US Securities Act, the first Jamaican financial institution and the first Caribbean financial institution in 14 years to access that market. It was also the largest note issuance by a financial institution in the English-speaking Caribbean on record.

That transaction is not simply a balance sheet exercise. It is a market confidence signal. Rule 144A issuance requires a level of disclosure, governance, and institutional credibility that most financial groups in this region have never been asked to demonstrate. NCBFG met that standard.

The board’s decision to maintain the interim dividend at $0.50 per ordinary stock unit, payable June 5, 2026, reinforces the same message. Management is not rationing capital out of distress. It is distributing earnings in the ordinary course of a business; it clearly believes is performing as expected.

Context Is Everything

The risk in reading NCBFG’s current numbers without adjustment is that it produces an inaccurate base for forward analysis. Any investor or analyst comparing fiscal 2026 quarterly results to the prior year without normalising for the Thoma Group disposal gain is not comparing like with like. The $15.1 billion non-recurring item inflated prior-year earnings in a way that will mechanically suppress year-on-year comparisons for at least two quarters. This is not a flaw in the business. It is an artefact of how accounting works when a large capital gain lands in a single reporting period.

What matters is what the recurring earnings base looks like stripped of extraordinary items, and whether that base is growing. On the evidence of the most recent results, it is. Net interest income is up. Insurance underwriting profitability is up materially. Operating expenses are down. The balance sheet is growing. Equity is expanding. The group is paying dividends.

At a trailing twelve-month EPS of $8.91 and a recent stock price in the low to mid $50s, NCBFG is trading at a multiple that prices in continued difficulty rather than the underlying recovery that is actually underway. That is the more interesting question for investors with a medium-term horizon.

The group’s turnaround is not complete. Credit quality trends following Hurricane Melissa warrant monitoring, and the strategic reorganisation of pension fund management and investment management into consolidated Centres of Excellence will take time to fully pay off. But the direction is clear, and the foundation is sound.

NCBFG is not a business reporting a 70 per cent profit decline. It is a business cycling off a $15 billion non-recurring gain and, underneath that comparison, quietly growing.

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Disclaimer: This commentary is provided for information purposes only and does not constitute investment advice. Readers should consult a licensed investment adviser before making investment decisions.