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Bermuda Commercial Bank Limited Reports 91% Growth In Net Income
Hamilton, Bermuda, May 11, 2006 -- Bermuda Commercial Bank Limited is pleased to announce financial results for the six months ended March 31, 2006. Net income increased from $2.23 million at March 31, 2005 to $4.25 million at March 31, 2006, an increase of $2.02 million or 90.6%.(1) Diluted earnings per share increased to $0.85 per share compared to $0.45 per share one year ago. Strict cost discipline across all departments resulted in the Bank's efficiency ratio improving considerably to 51.7%, from 68.0% at March 31, 2005.
President and Chief Operating Officer, Mr. Timothy W. Ulrich, stated that, "as in previous years the main driver of the Bank's profitability has been the continued strength of BCB's deposit taking business. For the six months ended March 31, 2006 net interest income increased by 51.1% to $5.68 million from $3.76 million at March 31, 2005. The pattern of U.S. interest rate increases which commenced in mid 2004 has continued into 2006 with four additional 0.25% rate increases during the six month period ended March 31, 2006. This has resulted in an average base interest rate for the period of 4.20% compared to 2.19% for the corresponding 2005 period. The continued fiscal tightening by the Federal Reserve Board has contributed to BCB's strong growth as the Bank's balance sheet is largely denominated in U.S. Dollars."
Due to the Bank's strong income growth, performance ratios have improved. Return on equity was 7.96% for the six month period compared to 4.56% for the prior year's first six months while return on assets increased to 0.59% from 0.37%.
The Bank has maintained it's commitment to a liquid, virtually risk free, balance sheet with cash and cash equivalents making up over 99% of total assets. This policy along with the Bank's solid history of profitability has contributed to BCB generating a substantial capital base and industry-leading capital ratios. As the implementation of the new Basel II framework on capital adequacy moves forward, the Bank remains comfortably within all international capital regulatory guidelines.
The Board of Directors has resolved to increase the half-yearly dividend to $0.30 per share to be paid on May 25, 2006, to shareholders of record as of May 17, 2006. Based on the Bermuda Stock Exchange bid price of $8.25 for the Bank's common stock at March 31, 2006, this semiannual dividend generates an annualized yield of 7.3% to the Bank's shareholders.