Bank Of Bermuda's Worldwide Subsidiaries Contribute To Strong First Quarter Results

by Amanda Banks, Tax-news.com, London

10 May 2001

The Bank of Bermuda has reported net income of $31.7 million for the first quarter of 2001, which is up 2.8 per cent from $30.8 million reported in the same quarter last year.

In a press release from the bank, chief financial officer, Edward H Gomez, said: 'These results were achieved in a demanding economic environment and reflect sustained strong earnings while continuing to invest for future growth of our businesses. In comparing the quarter's results with a year ago, it's worth noting that the earlier period was a time of record earnings due to exceptionally robust market performance and trading volumes. In contrast, the current combination of weakened sentiment in global equity markets and declining interest rates represents a restraint on both fee revenues and interest income.'

The bank's global headquarters are in Bermuda, whilst it has offices or subsidiaries in the Cayman Islands, Cook Islands, Dublin, Guernsey, Hong Kong, Isle of Man, Jersey, Luxembourg, New York, New Zealand and Singapore.

Increased global fund services fees were reported in the Americas and Dublin due to the Dublin office's recent undertaking to manage 14 offshore funds of a New York-based hedge fund specialist. This contributed to 34 per cent year on year global fund services revenue growth for that office.

In Hong Kong, revenue from retirement schemes administration was $1 million which was 92 per cent higher than the previous year's quarter as fees commenced on the bank's servicing of new retirement funds mandated by Hong Kong's government - the "Mandatory Provident Funds". However, the impact on custody fees of asset value declines and fund redemptions in the Far East resulted in an overall decline in the Hong Kong office's global fund services fees.

Oliver Webster, general manager of the Bank of Bermuda (Isle of Man), told the Manx press: 'We are particularly pleased with our contribution . . . our own numbers reflect a 28% increase in total revenue versus the same quarter last year, which translates into a 20% increase in net income for the quarter. Foreign exchange earnings generated by our treasury team have been extremely buoyant on the back of strong client trading activity aided by high but relatively predictable volatility in the markets.'

Back in Bermuda, Henry B Smith, the bank's president and chief executive officer, commented: 'We are proud to announce steadfast net income growth against a particularly challenging economic backdrop. Growth in net income over the same quarter last year demonstrates improvement in recurring revenue sources and strong underlying business trends. We continue to believe that our businesses have great opportunities and view the future with excitement.'

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