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Butterfield Reports Increase In Earnings But Fall In Profit
GEORGE TOWN, Grand Cayman (CNS) -- Butterfield Bank reported an increase in its core earnings for the first quarter of this year of more than 24% but saw its net income decline by $1.2 million, or 4.3%, compared to the same time last year.
During the first three months of the year, bank officials said asset quality was strong and improving, and although non-accrual loans were down from year-end to 1.2% loan demand was up here in the Cayman Islands. The Bermuda-based bank’s chief executive officer, Michael Collins, said it had delivered another quarter of strong financial performance.
“We continue to generate steadily growing and predictable earnings through wealth management acquisitions, deposit growth in community banking, and cost reductions across the Group,” he said in the report. “Our dual focus on revenue growth and expense management, while making significant investments in compliance, will position Butterfield for continued success as our core markets recover and the period of historically low interest rates comes to a natural conclusion.”
Although loan demand was high here, the bank said that in the absence of sustained loan growth it would deploy capital in wealth management acquisitions and the investment portfolio.
“During the first quarter, we restructured our management team in an effort to improve decision making and communication across the Bank,” Collins said. “We will continue to rationalise our business model, focusing on expansion in key international financial centres where we have expertise and scale. We are in the process of winding down our sub-scale deposit taking and investment management business in the UK, a project which will be completed in Q3 2016.”
The bank said it had incurred significant non-core expenses at the end of last year with the wind-down of the London bank and management restructuring and “recognised some additional charges” associated with the projects in the first quarter as well, but Collins said it improved the predictability of earnings going forward.
Chief Financial Officer Michael Schrum said the bank’s balance sheet was stable and liquid.
“Loan quality continues to improve, with minimal movements of loans into non-accrual status and the effects of ongoing remediation, refinancing and liquidation of existing problem loans leading to their removal from non-accrual status. Non-performing loans, which include gross non-accrual loans and accruing loans that are past due by 90 days or more, were broadly stable during the quarter,” he added.