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Bermuda Commercial Bank Profit Jumps By 33 Per Cent

Mairi Mallon, Royal Gazette

14 November 2000


This story is reproduced by kind permission of the Royal Gazette at http://www.accessbda.bm

Bermuda Commercial Bank, the Island's third bank, has seen its net income increase by more than 33 percent in the last year to a new record high.

The bank, which is listed on the Bermuda Stock Exchange and solely has corporate clients, also announced its assets for the year ended September 30, 2000 have risen by over 21 per cent to $566m.

"Earnings have reached a record high while expenses remain under impressive control," a statement from the bank said.

No shares in the bank, which has a market capitalisation of $31.8 million, were traded yesterday. The last time the stock changed hands on October 12, it traded at $7.45, just five cents off its 52 week high.

Bermuda Commercial Bank saw net income rise from $4.07 million in 1999 to $5.4 million in 2000 - a new record.

Earnings were also at a record high, with the total income reaching $13.2 million for 2000, compared to $12.1 million the year before.

The company, which is based on Church Street, saw its total assets rise nearly ten million, or 21 percent from $466.8 million in 1999 to $565.7 million.

Expenses were recorded at $7.76 million for 2000, down from $8.04 million in 1999. The efficiency ratio has gone from 66.38 percent in 1999 to 58.88 percent in 2000.

Bermuda Commercial Bank was set up in 1969 and in 1993 First Curacao International Bank took over management responsibility with John Deuss at the helm.

A release from the company said that chairman, president and chief executive Mr. Deuss emphasised that the growth was based on a low risk, liquid balance sheet to ensure risk free shareholder investment and depositor confidence.

Also reported in the latest figures was net interest income of $6.9 million, compared to the year before when it registered $5.7 million.

The Board of Directors approved a Dividend of $0.225 per share for the second half-year of 1999/2000, taking the full year dividend to $0.425, an increase of 6.25 percent over 1998/1999.

A statement from the bank states: "The increase in net income is attributable to an 8.84 percent increase in total revenues combined with a decline in expenses of 3.46 percent.

"One of the effects of asset growth is a 22.26 percent increase in net interest income. The decline in expenses is attributable to the continuous improvement in the use of systems for straight through processing coupled with strategic alliances designed to provide the Bank's clients with premier services offered by worldwide leaders.

"This allows the bank to handle a larger volume of transactions without adding material costs."

Earnings per share rose from $0.95 for the previous year to $1.27 for the year ended September 30, 2000.

The release from the bank continued: "The established policies and procedures of the bank allow for the steady growth and maintenance of outstanding client service.

"In the upcoming year, the Bank's management team will focus on marketing the bank's services in both the traditional sense and through the Internet to capitalise on the global opportunities presented by the growth of electronic delivery of financial services and e-commerce." This is the first statement from the bank in months about its beleaguered Internet banking service which was due to be up and running in January 2000 but so far has not materialised.

No mention has been made of who will take over the role of managing director at the bank which has not been filled in a permanent basis since last December.

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