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BlackRock and Fidelity build positions in Butterfield Bank

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BlackRock, the US multinational investment management corporation, is the world's largest asset manager

The world’s largest asset manager, with more than $10 trillion in assets under management, has been drawn to Butterfield Bank and now has built a substantial shareholding, according to a filing with the Bermuda Stock Exchange.

Butterfield has notified the BSX that two of the world’s largest investment companies have built substantial shareholdings in the bank.

New York-headquartered BlackRock Inc holds 5.8 per cent of the bank’s outstanding ordinary shares, while a second large financial institution, Boston-based Fidelity Management and Research, or Fidelity Investments, has a 5.7 per cent holding.

BlackRock has grown AUM to $10.008 trillion, as its diverse product mix and global reach position it to capitalise on market trends and client needs.

GuruFocus Research, reporting in Yahoo! Finance, describes BlackRock as “a financial behemoth, boasting a diverse product mix that spans equity strategies, fixed income, multi-asset classes, money market funds and alternatives”.

BlackRock has just reported $289 billion in full-year net inflows, including $96 billion in the fourth quarter of the year.

Meanwhile, Fidelity Investments had $4.9 trillion in total discretionary assets at year-end 2023 and its global presence spans nine countries across North America, Europe, Asia and Australia.

Butterfield declared net income of $225.5 million for the year ended December 31, compared with $214.0 million in 2022.

The results included a fourth-quarter profit of $53.5 million, as the board of directors declared a quarterly dividend of 44 cents a share and approved a new share-repurchase authorisation for up to 3.5 million common shares.

For the year, the bank had a return on average common equity of 24.2 per cent, and core return on average tangible common equity of 27.0 per cent. The results included a net interest margin of 2.80 per cent, and the cost of deposits was 1.40 per cent.

Stock analysts at Simply Wall Street are optimistic about the trajectory of the Bermudian-based company’s share price.

With input from five analysts, Simply Wall Street has forecast that the bank’s share valuation will increase over the next year to trade at $35.20 on the New York Stock Exchange.

The most bullish analyst valued the stock at $40 and the most bearish at $32 per share.

Butterfield shares closed on Thursday at $29.89 on the NYSE. The bank’s shares also trade on the Bermuda Stock Exchange.

Butterfield Bank headquarters on Front Street in Hamilton (File photograph)

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Published March 01, 2024 at 7:59 am (Updated March 01, 2024 at 7:59 am)

BlackRock and Fidelity build positions in Butterfield Bank

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