Beneficial Corporation reports 13% increase in third-quarter earnings.WILMINGTON, Del.--(BUSINESS WIRE)--Oct. 24, 1996-- - Earnings Per Share Increase 11% to $1.22 - - Nine-Month Earnings Increase 79% to $257.7 Million - - A Record Level - Beneficial 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 $67.9 million, up 13% from earnings of $60.1 million in the third quarter of 1995. Comparable earnings per share increased 11% to $1.22 from $1.10 in the 1995 period. These are the highest third-quarter earnings in the Company's history. "We are pleased to report strong third-quarter earnings on the heels of our record-breaking first half performance," said Finn M. W. Caspersen, chairman and chief executive officer. "This brings nine-month earnings for Beneficial Corporation to a new record level. "Third-quarter operations were marked by strong receivables growth and a noticeable widening of lending spreads from the previous quarter's level. In addition, operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. and efficiency ratios improved from the year-earlier level." Caspersen concluded, "We continue to be on track for a record earnings year." For the first nine months, earnings increased 79% to $257.7 million from $143.6 million in the 1995 period. Comparable nine-month earnings per share jumped 79% to $4.68 from $2.62 in 1995. Last year's nine-month results were reduced by a $38.6 million aftertax loss in the tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. anticipation loan (RAL 1. RAL - Rutherford Appleton Laboratory (UK). 2. RAL - An expert system. ) business, while this year has been marked by a sharp resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. in RAL net earnings to $70.0 million. Total managed receivables increased $444 million during the third quarter before the impact of foreign exchange translation, compared to an increase of $245 million in the year-ago quarter. Receivables growth benefited from continuing strong growth at Beneficial National Bank USA, the private-label credit card subsidiary, and from some gradual strengthening of loan growth in 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. loan office system. Total managed receivables at September 30 were $15,633 million, up 14% from $13,668 million at September 30, 1995. For the first nine months, total managed receivables, before foreign exchange translation, increased $1,120 million, up from a gain of $644 million in the comparable 1995 period. Reflecting the greater proportion of unsecured loans Unsecured Loan A loan that is issued and supported only by the borrower's creditworthiness, rather than by some sort of collateral. Notes: Generally, a borrower must have a high credit rating to receive an unsecured loan. in the portfolio and the anticipated maturing of the private-label credit card portfolio, net chargeoffs increased during the third quarter. Total third-quarter net chargeoffs increased to $80.9 million from $54.5 million in the third quarter of 1995. As a percentage of average owned receivables, third-quarter net chargeoffs increased to 2.34% 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 1.73% a year earlier. The degree of increase in this ratio was somewhat inflated by the large securitizations completed during the second and third quarters of this year, which have reduced the owned receivables denominator denominator the bottom line of a fraction; the base population on which population rates such as birth and death rates are calculated. denominator . On a managed basis third quarter net chargeoffs increased to 2.04% of average managed receivables, up from 1.56% on the same basis a year earlier, and 1.75% in the second quarter of this year. For the first nine months, net chargeoffs increased to $218.2 million from $139.8 million in the 1995 period, while the net chargeoff percentage of average owned receivables rose to 2.10% from 1.48% in 1995. On a managed basis, the nine-month net chargeoff ratio rose to 1.88% from 1.35% in 1995. All owned receivables delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. two months and greater on a contractual basis increased to 4.03% from 3.50% at June 30, 1996, and 3.19% at September 30, 1995. The increase reflects somewhat higher delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates on unsecured loan portfolios as well as the influence of the large securitizations mentioned previously. Including the total of $2,451 million of receivables sold with servicing retained reveals a delinquency percentage for all managed receivables of 3.71% at September 30, compared to 3.30% at June 30 of this year, and 3.16% at September 30, 1995. At September 30, the reserve for credit losses was 3.42% of owned receivables, increased from 3.31% at June 30 of this year, and 2.90% at September 30, 1995. During the third quarter, $13.3 million was added to the balance of the loss reserve, increasing the reserve to $450.6 million from $437.3 million at June 30, $406.1 million at year-end 1995, and $359.1 million at September 30, 1995. At the current level the reserve covers annualized nine-month net chargeoffs 1.55 times, a conservative ratio by industry standards. Beneficial Corporation is a $15 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, Canada, the United Kingdom, Ireland, and Germany. -0-
FINANCIAL HIGHLIGHTS
Three Months Nine Months
Ended September 30 Ended September 30
(in millions, except
per share amounts)
1996 1995 %Change 1996 1995 %Change
Net Income $67.9 $60.1 13% $ 257.7 $ 143.6 79%
Earnings per
Common Share $1.22 $1.10 11% $ 4.68 $ 2.62 79%
Dividends per
Common Share $ .52 $ .47 11% $ 1.46 $ 1.33 10%
Shareholders` Equity $ 1,679.5 $1,503.3 12%
Finance Receivables Owned
$13,182.0 $12,403.0 6%
Finance Receivables Managed
$15,633.2 $13,667.9 14%
Allowance for Credit Losses
as a Percentage of Owned
Finance Receivables 3.42% 2.90%
Return on Average
Equity (annualized) 21.5% 13.3%
Return on Average Assets (annualized) 2.16% 1.32%
CONTACT: Beneficial Corp., Wilmington MEDIA CONTACT: Robert Wade Robert Wade or Bob Wade is the name of several notable individuals:
302/425-2500 or ANALYSTS CONTACT: Karen Pagonis Samuel F. McMillan 302/425-2100 http://www.beneficial.com |
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