Butterfield beats estimates with $50.9m profit
Butterfield Bank ended 2018 on a high with fourth quarter net income of $50.9m or $0.92 per share, compared to $50.4m in the third quarter of 2018 and $40.3m in the fourth quarter of 2017.
For the year, the bank achieved net income of $195.2m, or $3.50 per share, up from $153.3m. Core net income, which includes revenue, gains, losses and expense items incurred in the normal course of business, jumped to $197m from $158.9m a year earlier.
Michael Collins, chairman and CEO, said: "2018 was an important year for Butterfield as we completed two strategic and accretive acquisitions and continued to grow our residential loan portfolio in central London, while producing industry leading returns.
“We also reported another solid set of financial results in the fourth quarter, which contributed to Butterfield’s record profitability. Our strong risk-adjusted returns benefited from a profitable and highly rated investment portfolio, a conservatively underwritten loan book, diversified fee income and diligent management of expenses”
"We also reported another solid set of financial results in the fourth quarter, which contributed to Butterfield's record profitability. Our strong risk-adjusted returns benefited from a profitable and highly rated investment portfolio, a conservatively underwritten loan book, diversified fee income and diligent management of expenses."
The strong income growth benefited from a $62m increase in interest income from interest earned on loans as a result of larger volumes and higher rates. The March 2018 acquisition of Deutsche Bank's Global Trust Solutions business contributed to the $10.9m increase in non-interest income with higher trust fees and revenue.
At the same time, the expanded trust business and new teams led to a $14.6m increase in salaries and other employee benefits. Last year Butterfield also acquired Deutsche Bank's banking and custody business in Cayman, Jersey and Guernsey.
The bank paid out $14.6m more in salaries and employee benefits last year, some of which was due to new teams to service its expanded trust business; and there was a $6.4m increase in non-interest expense "as a result of higher technology and communications costs" incurred in Jersey, Singapore and Mauritius.
Looking ahead, the Butterfield chief executive sees the bank well positioned for organic growth and said the group would continue to seek strategic acquisitions in private trust and banking in its current markets.
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