Butterfield Cayman bucks global trend

| 09/03/2009

(CNS): While banks around the world have reported record losses Butterfield Bank (Cayman) Limited has bucked that trend with a record net income for the year ended 31 December 2008. However, the bank’s parent company, the Bank of NT Butterfield and Son hasannounced that the Bermuda government has guaranteed a capital raising initiative of US$200 million. The capital will be raised through the issuance of non-convertible preference shares. 

According to the Cayman bank’s managing director Conor O’Dea, Butterfield Cayman was enjoying growth in most areas of its business with both customer deposits and customer loans going up. “Butterfield in Cayman had a very good year.”

“Against a backdrop of global economic problems and decline, we generated a record net income and good growth in our credit businesses.  Our Wealth Management business continues to do well with an increase in assets under management of 42.9%.  Assets under administration have declined by 6.3%, a good performance given current market conditions.  In January 2008 we established our new Private Banking division and this has been met with a very favourable response and has helped grow our balance sheet.  We continue to experience good growth in all our lines of business,” O’Dea said.

Financial highlights include: a record net income of US$78.3 million and a recurring net income of $27.4 million; capital ratio at 31 December 2008 was 11.35% and continues to meet regulatory requirements; customer loans were up 34.5% year on year to $507.6 million, Customer deposit levels grew by 24.1% to $3.1 billion: and  assets under management grew by 42.9% to $748 million.

O’Dea noted the opening of the bank’s new George Town premises and he said the bank would be continuing to invest in its future. “We were delighted to welcome customers and employees to our new premises at Butterfield Place, our new US$45 million facility,” he added.. “We continue to invest in our business and will be introducing a new banking system in 2010 to meet the growing and increasingly sophisticated needs of our customer base.  This year’s solid operating results will, no doubt, provide us with added momentum towards sustaining our continuing growth despite global economic conditions.”

The additional capital for the Bank of NT Butterfield & Son Limited is intended to bolster capital reserves as it dealt with growing global economic uncertainty, the bank said. 

In a statement Friday to the House of Assembly  in Bermuda, Finance Minister Paula Cox said, "The Bermuda Monetary Authority has also advised the Ministry of Finance that in the absence of a private sector solution providing assistance was a proactive and precautionary measure that would ensure the safety and soundness of Butterfield Bank. Therefore, in the national interest and in the true spirit of public-private partnership, the Government of Bermuda has agreed to support the bank’s offering of a $200 million preference share issue by guaranteeing the principal of, and dividend payments on, the preference shares to be issued to private investors. In addition, Government has committed to purchase any preference shares from the offering that are not subscribed by private investors."

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