"We are continuing to achieve steady, consistent growth in quarterly earnings, as we demonstrated throughout our last financial year," said Calum Johnston, President & Chief Executive Officer. "In particular, we have seen solid improvements in our Community Banking business in Bermuda and a return to profitability, following our restructuring initiatives, of the Hong Kong operation. Also, our Asset Management, Grand Cayman, Guernsey and Davenham businesses have all outperformed the like period last year."
"The Bank is operating Year 2000 compliant versions of all our Mission Critical Systems and our Business Continuity Planning, to ensure the core businesses of the Bank continue if a mission critical system fails, has reached near completion," said Mr. Johnston. "We have worked closely with IBM Corporation's Transformation 2000 consulting team in this regard and are dedicated to ensuring we will continue to meet the needs of our customers into the Year 2000 and beyond."
Richard Ferrett, Executive Vice President & Chief Financial Officer, commenting on the Bank's financial performance, stated that, "the first quarter 1999/00 performance outperformed all four quarters last financial year and, at $9.41 million, was up a pleasing 6.8% year on year. In particular, net interest income, at $20.31 million, was up $2.86 million or 16.4%, over the like period last year, reflecting the Bank's balance sheet management strategies, an increasing loan book and the continuing success in reducing non-performing loans. Whilst expenses rose year on year by $1.77 million, much of this," said Mr. Ferrett, "was due to planned investment on information systems development, essential in order to achieve the efficiency goals we have set ourselves going forward. Our focus remains on enhancing customer service and shareholder value and this investment is essential to the continued success of the Bank."
Other Financial Highlights of the First Quarter were:
Total loans increased year on year by $80.82 million, reflecting the successful generation of new lending demand, particularly in our Community Banking business in Bermuda; this has impacted positively on net interest income generation.
The Bank's balance sheet remains strong and highly liquid, with some 67% of total assets comprised of deposits either placed with major international banks or in the Bank's high quality investment portfolios, which all carry investment grade ratings from Standard & Poor's, the world renowned credit rating agency.
Total assets, as at 30 September 1999 were $4.43 billion, a 3% reduction from the like period last year reflecting the Group's selective activities in the international inter-bank markets. Our core customer deposit base remains inherently stable.
The Group's Total Capital and Tier 1 capital ratios remain strong, at 13.0% and 9.4% respectively well in excess of regulatory requirements. Shareholder's equity, at $244.11 million, is up $16.33 million over the position at 30 September 1998, reflecting the Group's continuing positive earnings record.
Non-interest income, at $19.78 million, was down $0.49 million on the first quarter last year, reflecting the Bank's strategy to reduce lending related fees.
The net interest margin has widened to 1.9%, compared to 1.6% for the whole of last year. This reflects the improved quality of, and margins emanating from, our loan portfolio, plus increased earnings from our investment portfolios, against the backdrop of lower Bermuda dollar, US dollar and sterling interest rates.
The Board has decided to increase the quarterly dividend to 17 cents per share payable on Thursday 18 November 1999 to shareholders of record on Tuesday 9 November 1999.
Note to Editors:
The Bank's results, which are unaudited, are stated in accordance with accounting principles generally accepted in Bermuda and Canada.
The Bank of Butterfield Group is a vital community bank in both Bermuda and Grand Cayman and a specialist offshore financial services company that has chosen its markets, knows them well, and uses its knowledge to benefit institutional and individual clients. The Bank, established in 1858, offers a full range of banking, credit, investment, treasury, trust and custody services through its headquarters in Bermuda, as well as offices in Grand Cayman, Guernsey, Hong Kong and the United Kingdom. Bank of Butterfield is a publicly traded corporation with its shares listed on the Bermuda and Grand Cayman stock exchanges.
Further information concerning the Bank of Butterfield may be obtained from our web site: www.bankofbutterfield.com. The bank's share price is published daily in the Royal Gazette and also available on Bloomberg Financial Markets (symbol: NTB.BH) and The Bermuda Stock Exchange web site: www.bsx.com.