Butterfield Bank Loses $207 Million in 2010
Bank of Butterfield today (Feb 22) announced a loss for the full year ended 31 December 2010 of $207.6 million (or $0.47 per fully diluted share), compared to a loss of $213.4 million, or $2.34 per fully diluted share, in 2009.
Brad Kopp, Butterfield’s President & Chief Executive Officer, said “2010 was a year of building a strong foundation amongst challenging economics, starting with the successful capital raise bringing in new investors and an over-subscribed rights offering to our historical investor base. The resultant strong capital base and good liquidity position allowed us to finalise the process of ridding the balance sheet of problematic assets and putting realisable values on remaining assets. This leaves us with a strong capital base to withstand continued uncertainty in the global economic outlook and to support growth as our economies recover.”
Olivier Sarkozy, who led the investment in the Bank on behalf of The Carlyle Group, said “While unfortunate, the losses realised over the course of the past fiscal year represent the culmination of the balance sheet restructuring that was necessary to put the Bank back on a path of prudent risk management and sustainable growth, as was envisioned at the time of the recapitalisation. We are pleased with the progress the Bank has made in this regard and happy that the Bank’s results are consistent with, if not slightly better than, our original projections.”
Brad Rowse, Executive Vice President & Chief Financial Officer, commented, “We continued to face pressures from historically low interest rates throughout much of 2010, which constrained our net interest margin on lower deposit volumes. Our strong liquidity has allowed us to invest more of our asset base in high quality government-backed securities which yielded improved margins in Q4 and, combined with the relative stability of our fee income, positions us well for 2011. With respect to expense management, the Bank reduced headcount through a combination of a general hiring freeze, attrition and, in certain locations, restructuring that saw total personnel drop from 1,606 at year end 2009 to 1,519 at 31 December 2010. Maintaining the appropriate staffing levels in light of changing business volumes and the
need for continued strength in customer service continues to be an area of focus.“
The full 8-page news release is below, click Full Screen for greater clarity:
There was a time when Butterfield Bank would have record profits year after year. Raking in fees hand over foot. I would imagine that there will be some jobs that will be cut now.