Somers’ full-year profit falls to $19.4m
Somers Ltd, owner of Bermuda Commercial Bank, said net income fell nearly 40 per cent to $19.4 million for the year ended September 30.
The financial-services holding company with interests in the UK, Australia and Ireland said BCB had made a $1.1 million profit, while the group had slashed its total borrowings to $4.5 million from $26.5 million a year earlier.
Warren McLeland, chairman of Bermuda Stock Exchange-listed Somers, said it had been a “strong year” for the group, with increases in the value of its 62 per cent stake in Australian lender Homeloans and its 62.5 per cent stake in UK wealth manager Waverton Investment Management.
“With supportive capital markets, our investments have been able to grow their assets under management and this has had a positive impact on their financial results,” Mr Mcleland said.
“Unlike in 2016, currency movements have been mildly positive for our valuations with both sterling and the Australian dollar strengthening against the US dollar.”
Somers reported an 11-cent decrease in net asset value per share to $18.55, mainly due to the issue of shares from the pro rata bonus warrant issue at a discount to net asset value earlier in the year.
Mr McLeland added that another UK investment, PCF Group, had received a British deposit-taking licence in July.
“Since then, PCF has built up its deposit base to £53 million ($71 million) and this will assist their future growth,” Mr McLeland added.
The Somers board declared a final dividend 28 cents per share, to bring the total dividend for the year to 48 cents per share, up 4 cents on 2016. This represents a 3.4 per cent yield on Somers' $14 share price at the end of the period. Today, Somers was trading at $14.50 on the BSX.
Homeloans is now Somers' largest investment with a value of $107.5 million and reported assets under management of A$10.2 billion ($7.8 billion).
The values of investments in Homeloans, Waverton and PCF all rose, driving a $15.2 million gain in Somers' investment portfolio.
But the valuation of BCB decreased “due to the delay in BCB implementing its new strategic plan”, Somers said.
Somers added BCB had a capital ratio of 22.5 per cent at September 30, with 49 per cent of assets in cash and high quality liquid assets.
Waverton posted pre-tax income of £9.4 million, up from £7.9 million in 2016, and assets under management of £5.2 billion.
During the year, Somers sold its stake in Ascot Lloyd for £15.3 million and used the proceeds to pay off bank debt.