"During the past four months the executive management team has started implementing a strategic plan to position the bank for improved profitability. Similarly, by increasing the dividend, we're making sure that shareholders are positioned to enjoy an appropriate reward for having entrusted us with their capital and good faith," said John Tugwell, President & CEO.
Mr. Tugwell added, "I hope shareholders will recognise that the increase reflects our Board of Directors' confidence in our strategic plan which, in my view, has been the chief contributor to our share price's rise." The Bank's share price rose at the end of financial year 1996-97, from $9.75 in early May to $11.25 at the end of June. The share price stood at $13.75 at the conclusion of last weeks trading.
Prior to the fiscal year end, the Bank of Butterfield took strategic decisions to close its Singapore office and exit certain U.K. operations, as well as to strengthen loan loss reserves to $21.1 million at year-end 1997, up from $15.7 in the previous year. Doing so provided for certain non-performing assets in discontinued and continuing operations, while improving the quality of future earnings streams. Efforts are also underway to flatten the bank's organizational structure with an eye toward increased efficiency and a reduced cost base. These decisions have addressed the main reasons for the bank's lacklustre earnings performance.
"With these problems behind us, we are building for the future on fundamental strengths of our business, which include our inherently stable customer base, as well as strong capital and liquidity positions," said Sarath Wikramanayake, Executive Vice President & Chief Financial Officer, adding, "Early indications are that the strategy will be successful."
Bank of Butterfield Group's weighted risk asset ratio stood at 12.8% at year end, as compared with 11.0% at year-end 1996. Also at year-end, the bank's liquidity position remained very strong with the total loans-to-assets ratio standing at 28%, as compared with 31% in the prior year. These figures, and other key performance measures, will be updated when the bank announces its first quarter 1998 results subsequent to the 1997 Annual General Meeting for Shareholders on 29 October, 1997. The announcement of first quarter results marks the start of a new quarterly reporting schedule adopted by the Bank of Butterfield. The organisation has committed to report results in February, May, August and October each year, which will also be the new quarterly dividend- payment months in future.
The Bank of N.T. Butterfield & Son Limited is a $4.43 billion global banking company, established in 1858. The bank, which serves institutional and individual clients, has its headquarters and four branches in Bermuda, as well as offices in Grand Cayman, Guernsey, Hong Kong and the United Kingdom. Bank of Butterfield common stock trades on the Bermuda Stock Exchange.