"We continue to build on the solid start made this financial year in all our core businesses," said Calum Johnston, President & Chief Executive Officer, "all of which have been outperforming the earnings levels seen last year. We are especially pleased that our Hong Kong operation is now making consistent positive contributions to the Group's earnings. Also, we have seen significantly increased contributions made by our Bermuda based Community Banking business and, overseas, our Grand Cayman, Guernsey and UK operations; all of which have been contributing at record levels. Our purchase this month of the ANZ Bank (Guernsey) Limited, which is being merged into our existing Guernsey subsidiary, demonstrates our commitment to continued strategic growth in our key businesses."
"The Bank's successfully met the challenge of Y2K, with all systems continuing to operate as normal. This was achieved without excessive cost, said Mr. Johnston, "and we are now focusing attention on improving our information and operating systems in Bermuda; which is essential in order to improve efficiency and thereby earnings going forward."
Richard Ferrett, Executive Vice President & Chief Financial Officer, commenting on the Bank's financial performance, stated that, "first half 1999/00 net income of $19.18 million was a record for the Bank, representing an increase of $1.37 million, or 7.7%, over the same period a year ago. In addition, second quarter net income of $9.76 million was also a record for the Bank, being up 8.5% on the like quarter a year ago, and also up 3.7% on the first quarter earnings."
"Fees and other income were in line with that achieved last year and net interest income saw a significant improvement, at $40.50 million up $6.85 million, or 20.4%, over the like period last year. This reflects a number of factors, including increases in the Bank's loan and investment portfolios, in line with the Bank's balance sheet management strategies, and the continuing success in reducing non-performing loans. Whilst expenses rose year on year by $5.60 million, this" said Mr. Ferrett, "was due to planned investment in the Bank's operating systems in Bermuda, necessary to improve our operating efficiencies and, thereby, both customer service and shareholder value"
Other Financial Highlights of the First Half-Year were:
· Return on equity was 15.6% for the half year and 15.8% for the second quarter, compared to 15.2% last half year and 15.4% for the first quarter this fiscal year.
· Earnings per share increased year on year by 11 cents to $1.04, of which 53 cents was achieved in the second quarter.
· The return on assets improved from 0.75% a year ago to 0.86% for the first half 1999/00 and the net interest margin widened to 1.9%, compared to 1.6% for last year. This reflects the improved quality of, and margins emanating from, our loan portfolio, plus increased earnings from our investment portfolios.
· Total loans increased year on year by $162 million, reflecting the successful generation of new lending demand, particularly in our Community Banking business in Bermuda, and an increased loan portfolio in Grand Cayman.
· The Bank's balance sheet remains strong and highly liquid, with some 66% 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. These portfolios enabled the Bank, through the €˜repo' market to ensure sufficient liquidity was available over calendar year end to meet any unanticipated customer requirements. This did not occur and the Bank's customer base remains inherently stable.
· Total assets, as at 31 December 1999 were $4.38 billion, a 2.8% reduction from the like period last year due to the Group's selective activities in the international inter-bank markets. Shareholders' equity increased by 6.9% to $247.39 million, reflecting a $26.38 million year on year increase in retained earnings.
· 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.
The Board has decided to maintain the quarterly dividend at 17 cents per share payable on Tuesday 15 February 2000 to shareholders of record on Tuesday 1 February 2000.
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 is also available on Bloomberg Financial Markets (symbol: NTB.BH) and The Bermuda Stock Exchange web site: www.bsx.com.