Market turmoil slashes profits at NCB

PRETAX PROFITS plunged by 93 per cent at stockbrokers NCB last year, as it continued to be affected by the ongoing turmoil in financial markets.

Accounts just filed with the Companies Registration Office show NCB Group and subsidiaries’ pretax profits dropped by 93 per cent from €956,000 to €66,000 in the year to the end of November last. The sharp decrease in pretax profits follows a similar 93 per cent drop in 2008, when pretax profits dropped from €13.5 million to €956,000.

The fall in profits last year came as revenues decreased 29 per cent from €38.8 million to €27.4 million.

Businessman Seán Quinn has just under a 25 per cent share in NCB, with management and staff having the majority shareholding.

Commenting on the results, a spokesman for NCB said: “NCB’s response to the unprecedented market conditions that prevailed in 2009 ensured that the firm emerged in a very strong financial position.”

He added: “At year end, NCB had no debt, net assets of over €38 million and cash balances of €17.3 million.”

He stated that “NCB managed to break even last year, notwithstanding the most challenging market conditions for the financial services industry in Ireland.”

The group, with offices in Dublin and London, generates its revenues through fees from stockbroking and corporate finance.

The accounts show that during the year the group cut operating costs by 28.5 per cent from €39.6 million to €28.2 million.

In the 12 months in question, the group recorded an operating loss of €798,000 – up 8 per cent on 2008. However, this was offset by investment revenues of €1 million.

Staff numbers at NCB were cut last year by 25 to about 140, with the remaining staff invited to voluntarily take a pay cut of up to 20 per cent and win back the difference based on their performance.

The combined impact of the job reduction and pay cuts resulted in the group’s staff costs being reduced by €22.5 million to €14.7 million.

The figures also show that payments to its seven directors dropped from €2 million to €1.3 million.

The 2009 accounts include a dividend payment of €1.2 million but this relates to an inter-company transfer rather than a payout to shareholders, who did not receive a dividend last year.