Cayman operations boost Butterfield’s earnings

The Chief Executive Officer of Butterfield, Michael Collins, said the bank was encouraged by improving economic conditions last year, which has resulted in a 6% increase in deposits, and a boost to core earnings of over $7.5 million, according to figures in the bank’s annual report. Butterfield’s net income last year was still down $30.5 million year over year due to expenses, but with revenue from the Cayman operations before gains and losses of $47.9 million at the end of 2015, up $14.4 million on 2014, the island helped keep up earnings.

Net income growth in Cayman was due mostly to increases in interest, income on loans and investments and non-interest income led by volume-driven foreign exchange income, banking, trust and asset management fees, partially offset by increased amortisation of intangible assets, the bank said.

Total assets held by the Cayman branches at the end of last year was $3.3 billion, up $0.4 billion from year-end 2014, reflecting higher client deposit levels.

“Net loans of $1.1 billion were flat from year-end 2014 levels following several large commercial loan repayments partially offset by growth in consumer loans and residential mortgages. The available-for-sale investments of $1.0 billion were up $0.2 billion from year-end 2014,” the report reveals.

Officials from the bank, which is headqurtered in Bermuda, said that over the past few months it had implemented a number of changes that will position the bank for stronger earnings in future.

Pointing to a planned wind down of private banking business in the UK, Collins said the bank was turning to markets where it has a substantial presence and a long history of success.

“Building upon our recent acquisitions in Bermuda, Cayman, and Guernsey, we continue to strengthen our unique trust and wealth management platform. Our agreement to acquire the Private Banking Trust and Investment Management business of HSBC in Bermuda, a transaction which is expected to close in the second quarter of 2016, along with the planned wind down of our sub-scale private banking operation in London are manifestations of a strategy that will further contribute to improvements in the Bank’s run rate,” he said.

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