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Bank Of Butterfield Reports Record Annual Net Income

by Carla Johnson, Investors Offshore.com

10 August 2001

The Bank of NT Butterfield & Son has reported that its quarterly net income before discontinued operations of $16.14 million for the fourth quarter (ending 30 June 2001) is up 47.5%, $5.20 million higher than that achieved at the same stage a year ago. After income from discontinued operations of $0.29 million relating to recoveries of loans written off, the fourth quarter net income was a record $16.43 million. This was the twelfth consecutive quarter on quarter earnings increase.

Furthermore, net income from the Bank's continuing operations for the financial year ending 30 June 2001 was also declared a record at $66.73 million. Net income per share for the fourth quarter was 93 cents per share, up 5 cents on the third quarter. For the full year under review net income per share increased by 55.4%, or $1.23, to $3.45 per share. As a result of this the Board has decided to increase the quarterly dividend by 2 cents (+6.7%), to 32 cents per share, resulting in a 54.7% increase in the annual dividend to $1.16, and also to make a one for ten bonus share issue effective 14 August 2001.

Commenting on the Bank's performance, Calum Johnston, President & Chief Executive Officer said: 'It is very pleasing to report, once again, a year of record profits. For the third consecutive year Bank of Butterfield recorded the highest level of net profit in its long history and again all our financial targets were met or surpassed. In particular return on equity was 22.7%, up from 16.4% last year, and the efficiency ratio improved from 67.1% a year ago to 62.2%.'

Mr Johnston continued: 'The financial year was one of substantial progress and we continue to follow our documented strategy of building on our strengths to produce long term sustainable and profitable growth, as evidenced by the acquisition last month of the Guernsey operations of the Canadian Imperial Bank of Commerce.'

Other financial highlights of the year (after losses from discontinued operations) include:

  • The return on assets improved year on year from 0.88% to 1.23%
  • Total loans increased year on year by $167.55 million, or 13.0%, to $1.45 billion. The loan portfolio now represents 27.9% of total assets
  • The balance sheet remains highly liquid, with some 68.8% of assets employed in either deposits with banks or in investments. Deposits with banks increased by $176.6 million, or 11.7%, as a direct result of the increase in customer deposits
  • Shareholders' equity increased year on year by 14.5% to $286.5 million, reflecting the increase in retained earnings less share buybacks. The Group's total capital ratio continues to remain strong at 14.9%
  • The Stock Option Trust now holds 1,864,547 shares, representing 9.6% of the Bank's total issued shares, at a cost of $31.37 million, an average of $16.82 per share, to satisfy current and future obligations under an Employees Stock Option Plan
  • At the current share price of $32.00 the Bank's price earnings multiple is 9.3, based on earnings per share of $3.45 for the year ended 30 June 2001

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