Butterfield Bank in black with positive outlook
(CNS Business): The Chief Executive Officer at Butterfield Bank, Michael Collins, said the bank was continuing to see the positive financial impact of acquisitions in trust and wealth management in its offshore markets such as Bermuda, Cayman and Guernsey, as the Bermuda-based bank released its second quarter results. “As we focus on jurisdictions in which we have significant market share, Butterfield also accelerated the wind down of our London-based private bank, which is now nearing completion,” Collins said, as the bank announced an increase in core earnings of over $32 million, up by more than 15% on the same time last year.
However, despite focusing on these markets, the report shows that the bank helped improve its bottom line with the reduction in staff here in the Cayman Islands.
“Core salaries and benefits costs were $31.5 million in second quarter of 2016, down $0.6 million from a decrease in post-retirement medical expenses and defined benefit pension plans resulting from discount rate revisions, as well as a decrease in overall salaries due to a decrease in headcount in Bermuda and Cayman,” the bank said in its financial report.
Looking at the banks overall performance however, Collins said that it was facing a positive outlook as a result of the actions it had taken.
“It is pleasing to see that industry analysts and peers have taken note of our progress in recent weeks,” he said. “Citing the wind down of our London private bank, the recent acquisitions, and improvements in nonperforming loans, Standard & Poor’s affirmed our credit ratings while upgrading its outlook for the Bank from stable to positive earlier this month.”
With what Michael Schrum, Butterfield’s Chief Financial Officer, said was a strong, improved performance this quarter against a backdrop of limited economic expansion and low interest rates, the bank generated year-on-year core earnings growth.
“Recent acquisitions have improved our capacity to generate non-interest income, as improved margins drove improvements in net interest income, and we continue to exercise careful management of operating costs,” Schrum stated.
“We completed the acquisition of the private banking trust and investment management business of HSBC Bermuda in April, which contributed to a $1.6 billion increase in Bermuda deposits and which generated additional fee and commission-based revenue. Adjustments and improved alignment of our fees to various banking services also contributed to growth in non-interest income during the quarter.”
