BENEFICIAL CORPORATION REPORTS 17% INCREASE IN THIRD-QUARTER EARNINGS; Highest Third-Quarter Earnings in the Company's History -.Corporation (NYSE NYSE See: New York Stock Exchange : BNL BNL Brookhaven National Laboratory (Upton, NY) BNL Bibliothèque Nationale de Luxembourg (French) BNL Banca Nazionale del Lavoro BNL Berkeley National Laboratory BNL Bare Naked Ladies ) today reported third-quarter net income of $60.1 million, up 17% from earnings of $51.4 million in the third quarter of 1994. Comparable earnings per share increased 16% to $1.10 from $0.95 in the 1994 period. These are the highest third-quarter earnings in the Company's history. "Beneficial's operating performance continued quite strong and in accord with the operating plan during the third quarter," said Finn M.W. Caspersen, chairman and chief executive officer. "Although receivables growth was less than the exceptional performance of the prior year, earnings benefited from a wider net interest margin of 10.16%, and from continued improvements in expense control. "While 1995 earnings were significantly impacted by the first quarter's loss provision for our Refund Anticipation Loan A (Tax) Refund Anticipation Loan (RAL) is a high interest rate short-term loan secured by a taxpayer’s expected tax refund. United States In the United States, the taxpayer commonly applies for the loan through a paid tax preparation firm. business, we continue to look forward to outstanding earnings improvement in 1996," Caspersen stated. "Toward that end, we are making concerted efforts to further improve operating efficiency of all operations. Current expense-reduction efforts in U.S. operations, particularly at headquarters, may result in a small charge in the fourth quarter. "We remain more optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op than ever about Beneficial's longer term prospects," Caspersen concluded. For the first nine months, earnings fell 15% to $143.6 million from $168.5 million in the 1994 period. Comparable nine-month earnings per share fell 16% to $2.62 from $3.13 in 1994. As previously announced, Beneficial recorded a $65 million pretax loss pretax loss A loss reported before tax benefits are considered. , or $39 million net aftertax, for the RAL 1. RAL - Rutherford Appleton Laboratory (UK). 2. RAL - An expert system. business during the first quarter of this year because of unanticipated changes in IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. procedures. Total managed receivables, both owned and serviced, increased $245 million before foreign exchange translation impact during this year's third quarter, compared to an exceptional gain of $421 million on the same basis a year earlier. 1994 third-quarter receivables growth benefited from unusually strong growth at Beneficial National Bank USA, reflecting the rapid store opening program of one merchant. Total managed receivables at September 30 were $13,668 million, up 12% from $12,153 million at September 30, 1994. For the first nine months, total managed receivables, before foreign exchange translation, increased $644 million, compared to a gain of $856 million in the comparable 1994 period. Through the first nine months, Beneficial has gained nearly 213,000 new customer accounts. Beneficial is on track for another year of managed receivables growth in excess of $1 billion. Credit quality remained strong by any historical measure. While chargeoffs and delinquencies have increased, the increases largely reflect the anticipated maturing of the large BNB BNB Bed 'n Breakfast BNB Banco do Nordeste do Brasil (Brazil) BNB Banque Nationale de Belgique BNB Bulgarian National Bank BNB British National Bibliography BNB Bad News Bears (movie) USA private-label credit card portfolio, as well as overall mix changes in the portfolio toward a somewhat greater proportion of unsecured loans. The chargeoff ratio on the higher yielding personal loan portfolio has increased this year. Third-quarter net chargeoffs increased to $54.5 million from $35.0 million in the third quarter of 1994. As a percentage of average owned receivables, third-quarter net chargeoffs increased to 1.73% of the portfolio on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis from 1.21% a year earlier. For the first nine months, net chargeoffs increased to $139.8 million from $107.1 million in the 1994 period, while the net chargeoff percentage increased to 1.48% from 1.26% in 1994. All owned loan and sales finance balances delinquent two months and greater on a contractual basis increased to 3.19% from 2.89% at June 30 of this year and 2.56% at September 30, 1994. Examining delinquency of managed receivables reveals a percentage of 3.16% at September 30, compared to 2.81% at June 30, 1995, and 2.55% at September 30, 1994. At September 30, the allowance for credit losses was $359.1 million, or 2.90% of receivables, significantly increased from the 2.67% of receivables level a year earlier, and unchanged from the 2.90% at June 30 of this year. At this level, the reserve remains particularly conservative both on an absolute basis and relative to net chargeoffs, covering annualized first nine months net chargeoffs 1.9 times. Also, the absolute balance of the reserve at September 30 is $27.5 million greater than at the 1994 year-end. During the third quarter, the loan loss reserve increased $11.7 million. The Company has received strong preliminary indications of interest in its German consumer banking operation, BFK Bank AG, which is for sale. Due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. is now taking place. Even assuming completion of the sale at a premium to book value, there is, nevertheless, the possibility of a modest special charge related to Germany at year-end because of the write-off of associated deferred tax accounts and potential reserve additions for the previously disclosed Fundus fundus /fun·dus/ (fun´dus) pl. fun´di [L.] the bottom or base of anything; the bottom or base of an organ, or the part of a hollow organ farthest from its mouth. loan portfolio. At this time analyses are not yet complete. Beneficial Corporation is a $14 billion, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Stock Exchange-listed financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. holding company. Subsidiaries of the Company provide financial services through their various consumer-finance, credit-card, banking and insurance operations located throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada, the United Kingdom and Germany. -0- Beneficial Corporation Financial Highlights
Three Months
Ended September 30
(in millions, except
per share amounts)
1995 1994 %
Change
Net Income $ 60.1 $ 51.4 17% Earnings Per Common Share $ 1.10 $ .95 16% Dividends per Common Share $ .47 $ .43 9%
Nine Months
Ended September 30
(in millions, except
per share amounts)
1995 1994 %
Change
Net Income $ 143.6 $ 168.5 (15)%
Earnings per Common Share $ 2.62 $ 3.13 (16)%
Dividends per Common Share $ 1.33 $ 1.19 12 %
Shareholders' Equity $ 1,503.3 $ 1,414.3 6 %
Finance Receivables Owned $12,403.0 $11,428.0 9 %
Allowance for Credit Losses
as % of Finance Receivables 2.90% 2.67%
Return on Average Equity 13.28% 16.43% Return on Average Assets 1.32% 1.71% CONTACT: Beneficial Corp., Robert Wade Robert Wade or Bob Wade is the name of several notable individuals:
(908) 781-3258 |
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