Bermuda Commercial Bank Release 1998 Annual Results.

Bermuda Commercial Bank has announced another strong set of annual results for the financial year ending 30th September. The Chairman of the bank, Mr. John Deuss, reported an increase in net income of 48% from $2.93 million to $4.32 million. The Board of Directors approved an increased Dividend of $.20 per share for the second half-year, taking the dividend for the full year to $0.35, an increase of 75% over 1996/1997. Mr. Deuss noted that "the strong performance by Bermuda Commercial Bank is a consequence of our policies - pursued consistently since 1993 - of ensuring a clean and liquid Balance Sheet, minimizing risk and adopting the best of modern technology to enhance customer service." Bermuda Commercial Bank is focussed exclusively on the Bermuda Marketplace.

Managing Director, Peter Roberts, added that whilst total income had grown sharply, total non-interest expenses had been held unchanged over the year. "We have seen our cost to income ratio fall consistently as planned over the year" said Mr. Roberts. "By year-end this key measure of efficiency stood at a creditable 64.1% whilst we still remain comfortably capitalized." Other key performance parameters reported include a Return on Equity of 13.87%, up from 10.20% the previous year and a Return on Assets of 0.80%, up from 0.57% the previous year.

During 1997/1998, Bermuda Commercial Bank formed a Strategic Alliance with State Street Bank and Trust for provision of global sub-custodian services. A Collaboration Agreement was also signed with Merrill Lynch Asset Management L.P. for provision of asset management products and services. BCB believes that where a service can be provided at higher quality and lower cost through partnership with the global market leaders, it is good for BCB and for its customers. These alliances are now fully operational and local access through BCB to these world class services have proved to be popular.

Assets under administration, custody and trust grew 19% from $4.7 billion to $5.6 billion.

During the year, BCB has continued to upgrade its systems and strengthen its staff. A major project to automate the back-office and release staff into customer service is well advanced. During the fiscal year 1997/1998 upgraded central banking and cash management systems were successfully brought on line, both Year 2000 compliant. BCB's banking systems have been "real-time" for several years now, but these new-generation versions give on-line account and securities information as transactions occur at the highest available levels of proven reliability.

The consistent improvement in the performance of Bermuda Commercial Bank since First Curacao International Bank took over responsibility for its management is demonstrated in the following table. The results of the past five years are shown by reference to net income, the annual dividends paid to the bank's 1100 shareholders, and by the cost to income ratio. Net income has risen over fourfold from just over 1.05 million in 1993/1994 to 4.32 million in 1997/1998. Annual dividends are three and a half times more than in 1993/1994 and the key efficiency ratio of cost to income has improved by over twenty percentage points from 84.70% in 1993/1994 to 64.12% in 1997/1998.

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