In 1997/1998, unexpectedly high but non-recurring client deposit levels raised the net income well above the "Trend Line", noted Chairman and Chief Executive Officer, Mr. John Deuss. The results for 1998/1999, featuring a net income of $4.1 million, with customer deposits at $428.2 million on September 30th 1999, marked a return to the established pattern of steady growth.
This growth resulted from policies, pursued consistently since 1993, of ensuring a clean and liquid Balance Sheet, minimizing risk and focussing exclusively on the Bermuda marketplace. The policy of focus on the local market had worked well but it was now time to look further afield to the global opportunities presented by the growth of electronic commerce. BCB intended to take full advantage of these opportunities.
The Board of Directors approved a Dividend of $0.20 per share for the second half-year of 1998/1999, taking the dividend for the full year to $0.40, an increase of 14% over 1997/1998. Mr Deuss noted that the Dividend for 1998/1999 was double that paid two years ago in 1996/1997.
Managing Director Peter Roberts noted that the Strategic Alliance between BCB and State Street Bank and Trust has strengthened further during the year. State Street act as BCB's global sub-custodian. A dedicated data link between BCB and State Street's Boston processing facility now permitted BCB access to more sophisticated reporting systems and additional processing capacity.
Mr. Roberts noted BCB's new product that has been developed jointly with State Street Global Advisors during 1998/1999, aimed at the local Captive Insurance Management business. The product offers Captive Managers access to a suite of State Street investment vehicles to give a choice of risk and reward suited to the Client's profile. The investment is accepted as collateral for a Letter of Credit needed by a captive insurer to guarantee payment to its parent company. BCB provides the banking facilities and State Street custodies the assets. Total cost to the client is very competitive. New business is expected to grow from the first quarter of the 1999/2000 fiscal year.
The Collaboration Agreement between Bermuda Commercial bank and Merrill Lynch Asset Management LP has continued successfully throughout the year. The Dollar Assets Portfolio (DAP) daily liquidity Money Market fund, has continued to be the flagship product and has exhibited consistently competitive interest rates. Deposits in BCB's Bermuda registered DAP feeder fund were around $400 million, on average, for the year.