Bermuda's Bank Of Butterfield Reports Quarterly Net Income Up 50%

by Amanda Banks, Tax-news.com, London

25 April 2001

The Bank of Butterfield has reported a record quarterly net income of Bds$15.36 million for its third quarter, which is up 50% year on year.

The bank states that the record net income of Bds$15.36 million was calculated after losses from discontinued operations of Bds$6.28 million. Net income per share, including discontinued operations, for the first nine months increased by 57.5% to Bds$2.52 compared to the same period the previous year. Return on equity was 22.4%, up from 16.0% at the same stage a year ago. As a result the bank has decided to increase the quarterly dividend by 2 cents to 30 cents per share to shareholders, payable on May 15.

In a statement released by the bank, Calum Johnston, president and chief executive officer, said: 'I am pleased to report the eleventh consecutive quarter of earnings growth and that all our businesses, both in Bermuda and abroad, continue to perform in line with, or better than, expectations. The need to recognise a loss of $6.28 million from discontinued operations in the third quarter results from a review of the overall level of provisionsrequired for the portfolio of loans remaining from our former businesses in the United Kingdom, which the Group exited in 1997. These loans have continued to prove difficult to collect. As a result the decision was taken to write off all of these loans. Accounting convention requires this loss to be deducted from net income from continuing operations for the quarter under review. Most significant is that there are now no loans remaining from these former businesses.'

He added: 'The third quarter was also notable for our successful acquisition of Matheson Bank Limited in the United Kingdom, in February, and the launch of Butterfield Direct Internet Banking, Bermuda's first Internet banking service, in March. Butterfield Direct is an important innovation that reinforces the Bank's commitment to meeting the needs of our customers.'

Total assets as at 31 March 2001 were a record $5.21 billion, compared to $4.82 billion a year ago. The increase of 8.1% reflecting continued growth in customer deposits and the Matheson Bank acquisition has increased balance sheet footings by $332 million.

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