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However, that amount will be lower if it creates fewer than jobs in Nova Scotia. For SMEs, the consumer bank manages cash, collections, and payments as well as offering loans. There are a couple of models being discussed.
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Upon completion of the transaction, which is subject to regulatory approvals, Butterfield will take over the ongoing management and administration of the GTS portfolio, comprising of approximately 1, trust structures for some private clients. While the terms of the agreement have not been disclosed, there are some clues about the scale of the deal. The Singapore platform that Butterfield will acquire is understood to have about 15 staff, and will generate about 20 per cent of the additional trust business revenue.
In a statement, Mr Collins, said: It also provides us with a physical presence in Asia, which we view as a growth market for Butterfield. The divestiture represents an important step in our strategy of simplifying our business and positioning wealth management for growth in our core markets. Mr Collins said the acquisition of GTS ticked a number of boxes for the bank, such as being at least two-thirds private trust business.
We expect it to generate stable trust fee income for the bank and be accretive once integrated. The transaction is expected to close in the first half of , subject to customary closing conditions. The results were released this morning, along with news that the bank is to acquire Global Trust Solutions from Deutsche Bank. We are also pleased to announce an agreement to acquire the Global Trust Solutions business from Deutsche Bank.
This acquisition will add scale and talent to our existing trust operations in Switzerland, Guernsey and Cayman and add a profitable and strategically important private trust platform in Singapore. We expect it to generate stable trust fee income for the Bank and be accretive once integrated.
Terms of the agreement have not been disclosed. Upon completion of the transaction, which is subject to regulatory approvals, Butterfield will take over the ongoing management and administration of the GTS portfolio, comprising approximately 1, trust structures for some private clients. The acquisition is expected to close in the first half of Mr Collins said it was the fourth significant acquisition for the bank since and was consistent with the strategy to grow by acquiring complementary businesses in select jurisdictions.
Announcing its third quarter results, the bank has declared an interim dividend of 32 cents per share to be paid on November The bank said paydowns in commercial lending were offset by new residential mortgages loans. The core return on average tangible common equity was Meanwhile, the core efficiency ratio for the third quarter of was The bank said improvements were driven by higher yields on the investment portfolio and on the adjustable-rate loan portfolio.
Net interest margin was 2. Improvements were said to have been driven by increases in net interest income and deposit costs which decreased slightly to 10 basis points from 11 basis points in the previous quarter. The bank stated that non-interest expenses are expected to continue to normalize over the next quarter as various temporary expenses abate.
This compares with Both of these ratios are significantly above regulatory requirements. This will ensure continuity of service for clients.
Its award-winning trust business comprises more than professionals based in the Bahamas, Bermuda, Cayman Islands, Guernsey and Switzerland, who provide estate and succession planning services, efficient co-ordination of family affairs, and administration of complex holding structures for a wide variety of financial and non-financial assets.
Meroe Park has been appointed as a non-executive director. She held increasingly senior positions at the CIA, including chief of human resources and a senior mission support officer for locations in Eurasia and Western Europe. She holds a Bachelor of Science degree from Georgetown University. I look forward to working closely with Meroe and our other directors as we continue to build shareholder value.
Butterfield Bank is confident it will return its operating expenses to its target level by the end of the year.
And while it has twice raised its lending rates this year, in line with moves by the US Federal Reserve, it has no declared intention on what it will do if there is a further hike by the Fed. Regarding expenses, the bank has a 60 per cent efficiency ratio target for the end of However, between March and the end of June it went off target. The bank was an official supplier and official Bermuda bank of the event, and it hosted more than guests and clients during the sailing competition in May and June.
Michael Schrum, chief financial officer, said: Butterfield Bank is aiming to cut operating costs as it moves some middle-office functions and back-office departments to its service centre in Canada.
It is expected that this will allow the bank to reduce its expenses in Bermuda and Cayman. Favorable tax treatment is a carrot for the bank to create more jobs in Nova Scotia.
Butterfield has a service centre in Halifax, where it employs about 35 people. Last month it amended a six-year agreement it made in December with Nova Scotia Business Inc, increasing the projected number of jobs it will create in the province from 50 to However, that amount will be lower if it creates fewer than jobs in Nova Scotia.
When asked by The Royal Gazette if jobs will be lost in Bermuda as a result of building up its operations in Halifax, a spokesman said the middle-office positions for which it is presently hiring in Halifax are primarily additions to the overall headcount of the group. The new positions are said to reflect investment in regulatory compliance and administration. However, the bank is expecting cost savings in the second half of this year, with a reduced salaries bill being a key component.
During an earnings conference call with analysts on April 26, Mr Collins was asked about the higher expenses. He said it was caused by two things: This may involve the redefinition and relocation of select roles based in Bermuda, the Cayman Islands and elsewhere within the group to Halifax. The Royal Gazette is supporting the effort by publishing weekly features on each of the 13 domestic companies listed on the BSX. In the fifth of the series, Jonathan Kent looks at Butterfield Bank.
Butterfield Bank may be in its th year in business, but in it is effectively embarking on a new era. Having been brought to its knees by the impact of the US subprime mortgage crisis nearly a decade ago, Butterfield can claim to have finally put that painful episode behind it after a pivotal last 12 months. Both interest and non-interest income rose last year and the prospects for further gains look good in an rising interest-rate environment.
Twice in the last four months, Butterfield has raised its base rate for residential and commercial lending in line with quarter-point hikes by the US Federal Reserve. And with the Fed signaling two or three more increases this year alone, that should translate into improving margins for the bank. Going forward, that translates into an attractive 4. Acquisitions over the past three years have included a trust business in Guernsey, banking operations in Cayman and last year, the private banking investment management and trust businesses of HSBC in Bermuda.
As the CEO stated in the annual report: While investors who have bought into the bank in recent years have done very well, longer-term shareholders still have a long way to go to recover the paper value they once had. What is evident from the share price, at more than 2.
A public secondary offering of common shares in the bank, including an additional offering to the underwriters, includes all 7. It had always been expected Carlyle would move on after between five and seven years as a major shareholder. That move helped the Bermudian bank overcome difficulties it faced after it lost millions of dollars as a result of the US sub prime meltdown.
It has a After the close of the markets on Wednesday, Butterfield announced the launch of the secondary offering. The bank will not receive any of the proceeds of the sale as the offering is from a group of major shareholders.
In a statement, the bank said a group of its shareholders, including affiliates of The Carlyle Group, intend to offer 9. In addition, the underwriter will be offered a day option to purchase up to an additional 1. The shares offered will include all 7. Butterfield will not be issuing any shares in connection with the offering. Raymond James and Wells Fargo Securities are acting as co-managers for the offering. The pricing and completion of the offering remain subject to a range of conditions.
The bank declared a dividend of 32 cents per common share for the last quarter of , a threefold increase on the previous quarter and the same quarter last year. Michael Collins, Butterfield CEO, said that the bank had successfully completed its initial public offering on the New York Stock Exchange, which had improved liquidity for shareholders and given the bank access to international capital.
The bank has declared a common dividend of 32 cents per share for quarter four , which is more than three times the 10 cents quarterly dividend paid to common shareholders for the fourth quarter of Michael Schrum, Butterfield chief financial officer, said: The private-equity firm planned to offload The Canadian Imperial Bank of Commerce, one of the major investors of , exited its 19 per cent stake.
The Canadian bank's remaining 23 million shares were taken by the Carlyle Group and subsequently sold to exiting shareholders. Carlyle's involvement in the bank was originally expected to last between five and seven years, however its investment is now held in a fund featuring a ten-year investment. Butterfield currently has six primary shareholders. Entities affiliated with the Carlyle Group hold Smaller shareholders include Bermudians and nominee companies. Once, until , the bank was majority Bermudian-owned.
At the time Butterfield was struggling due to the economy and toxic loans. It was given a new lease of life thanks to the refinancing. The new capital allowed Butterfield to de-risk its balance sheet and sell off hundreds of millions of dollars worth of troubled investments that had been backed by US mortgages.
Formerly the Bank of Bermuda Limited. At HSBC acquisition the bank employed 1, people but reduced this to about in Charges a monthly checking account fee. New-style micro-chipped debit cards to provide better security and contactless payment are being sent out to customers of HSBC Bermuda. The bank issued credit cards with chip and pin technology two years ago, following the introduction of the technology by Butterfield Bank and Clarien.
It has now extended the technology to its Visa debit cards. The chip allows for payments to be made simply by holding the card near a terminal, known as an RFID reader, which picks up a signal from the card. This does away with the need for the card to be swiped through a card reader.
HSBC is advising customers that the new cards will have a different expiry date to the old-style debit card they replace, therefore customers should notify vendors, such as Belco, of the new expiry date if they have an standing orders or recurring payments set up on them. The bank said all its existing Visa debit cards will be replaced by the end of October. HSBC Bermuda kept its staffing levels stable, even as it reduced operating costs by about 5 per cent. Sixty-forty is a somewhat contentious issue; when Bermuda was performing well, I could understand the desire for some ring-fencing of businesses.
David Burt, the Premier, also announced in the Budget that there would be consultation on expanding the types of banks that can operate in Bermuda. Details are scant, however Mr Watkinson believes it would be positive if it meant attracting quality banking sector brands to the island.
The bank has issued credit card customers with cards that include an integrated circuit on a chip, which is a card authentication security feature widely used in many parts of the world. The bank is moving to introduce the same technology to its debit cards.
Another technology introduced is Touch ID, which uses fingerprint or facial recognition to give customers access to mobile banking on iPhone 5S and newer models. The partnership between HSBC Bermuda and Eliza DoLittle has been in place for two years, and in the last three months of , HSBC staff served 1, hot meals and distributed groceries to 9, families and individuals.
People can do cooking, serving or food distribution. Last year we served 10, meals. We want the staff to feel they are playing a part. It is also a good opportunity for team building and a time for people to relax. Our adjusted return on equity is 17 per cent, which is above the 10 per cent target for the group. Non-performing loans decreased from Mark Watkinson, chief executive officer and director, said: The website also provides clear information about the process of applying for grants.
Soon the site will also feature an online grant application system, enabling local organisations to make paper-free applications.
The new website provides an in-depth guide to our new grant-making goals and assists potential grantees through the application process online. With a December 1 deadline for the first round of applications for grants, non-profit organisations are urged to visit the new website to learn more about the new focus areas for grant-making and the new application form.
Application form orientation is scheduled for early October and all non-profits are invited to attend. David Lang, managing director, oversees the overall relationships with the community and community organisations as well as the general business affairs of the foundation.
And Kim Pratt, senior trust officer, Butterfield Trust Bermuda Ltd, handles all inquiries and organizational administration.
The Bank of Bermuda Foundation website can be found at www. A fall in loan impairment provisions and lower operating expenses after the sale of private banking operations last year contributed to the increase. Return on equity was 12 per cent, exceeding the 10 per cent target of the parent group. The decrease was mainly due to the sale of the private banking operations to Butterfield, completed last April, which reduced the number of employees in Bermuda and cut support costs.
But non-performing loans, making up 14 per cent of the total loan portfolio, down from 17 per cent in The decrease is the product of the debt being paid off by borrowers outsizing new loans being taken out. Mr Watkinson said new mortgages tended to be smaller than older ones, given the 30 per cent fall in real estate values from pre-recession highs and the 20 per cent minimum down-payment requirement these days. But there is a split in the level of confidence between local and international.
In the local community, people are feeling much better about life. That filters through into car sales, so the auto sector is feeling very good. So in Bermuda we have to be very careful, because international business is a critical part of the economy and we need it to feel positive about Bermuda and the opportunities here.
You can walk down the street and put together a half-billion-dollar insurance policy. The regulators do a great job and Solvency II equivalence was an outstanding success and great work by the Bermuda Monetary Authority. HSBC said that the sale of its private banking operations allowed it to focus on core strengths in Bermuda. These are retail banking wealth management, including HSBC Asset Management and Premier banking, commercial banking and global banking and markets.
The bank is well positioned to absorb the impact of future regulatory requirements under Basel III. Charges a monthly checking account fee and more. Owned by Somers Ltd.
Warren McLeland, chairman of Somers, said: In particular, assets under management growth at Homeloans and strong deposit and loan growth at PCF has been pleasing. While markets are currently more volatile, our investments continue to produce strong operating earnings. During the three months, the UK pound appreciated 3. The Bermudian-based financial-services holding company, which owns Bermuda Commercial Bank, reported strong results across all its major investments. Our portfolio valuations were supported by favorable currency movements with positive sterling currency gains offsetting a weaker Australian dollar.
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