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NATWEST BANCORP TURNAROUND CONTINUES; POSTS $35.8 MILLION PROFIT IN SECOND QUARTER

 NATWEST BANCORP TURNAROUND CONTINUES;
 POSTS $35.8 MILLION PROFIT IN SECOND QUARTER
 NEW YORK, July 9 /PRNewswire/ -- National Westminster Bancorp (NatWest Bancorp) reported net income of $35.8 million in the second quarter of 1992 compared with net income of $30.3 million in the first quarter of 1992 and a net loss of $85.1 million in the second quarter of 1991. For the six months ended June 30, 1992, net income was $66.1 million compared with a net loss of $276.0 million for the corresponding 1991 period.
 Encouraged by the consistent and substantially stronger performance in the first two quarters of 1992, John Tugwell, chairman and chief executive of NatWest Bancorp, said "We believe this demonstrates the underlying strength of our core business and we expect further improvements in the coming quarters."
 Benefiting from the low effective tax rate, return on average equity for the quarter and six months ended June 30, 1992 was 8.21 percent and 7.64 percent, respectively. NatWest Bancorp's net income before goodwill amortization totalled $45.1 million for the quarter and $84.6 million for the first half of 1992. This represents a return on average tangible equity of 15.85 percent for the quarter and 15.14 percent for the six months.
 "Our primary goal is to build a North American presence that consistently provides an appropriate rate of return on our parent's investment," said Tugwell. "Our performance during the first half of 1992 underscores our ability to become a significant contributor to the NatWest Group's worldwide performance."
 Performance for the quarter and half year benefited from growth in net interest income and non-interest income along with continued tight control of operating expenses.
 Provisions for loan losses were $30.5 million and $61.0 million for the three months and six months ended June 30, 1992, respectively, down from $134.7 million and $356.6 million in the comparable 1991 periods. Net charge-offs totaled $31.3 million in the second quarter and $93.0 million for the half year period down from $102.4 million and $253.8 million, respectively, in 1991. NatWest Bancorp's allowance for loan losses was $657.5 million, or 4.63 percent of total loans outstanding at June 30, 1992, compared with $689.5 million, or 4.88 percent of total loans outstanding at Dec. 31, 1991, and $631.9 million, or 4.17 percent at June 30, 1991.
 Non-accrual loans totaled $1,126.1 million at June 30, 1992, down from $1,153.9 million at Dec. 31, 1991 and $1,336.3 million at June 30, 1991. Nonaccrual loans amounted to 7.92 percent of total loans at June 30, 1992, down from 8.16 percent at Dec. 31, 1991 and 8.82 percent at June 30, 1991. Foreclosed assets (including other real estate owned) amounted to $331.3 million at June 30, 1992, compared with $354.4 million at Dec. 31, 1991 and $301.3 million at June 30, 1991.
 Second quarter net interest income was $186.5 million, up from $180.5 million in the second quarter of 1991. For the six months ended June 30, net interest income was $363.3 million, up from $345.4 million in 1991. The increase reflects wider interest rate spreads along with lower interest lost on nonaccrual loans and foreclosed assets (net of interest income recognized), which declined from $77.9 million for the first half of 1991 to $55.1 million in 1992. Partially offsetting these factors was the impact of a decline in loan volume, reflecting both the recession as well as efforts to manage down the size of the relatively higher risk sectors of NatWest Bancorp's portfolio.
 Net interest income, on a tax-equivalent basis, as a percentage of average interest earning assets (net interest margin), increased to 3.83 percent in the second quarter and 3.76 percent for the first six months of 1992 compared with 3.77 percent and 3.61 percent in the respective 1991 periods.
 Non-interest income totaled $77.2 million for the three months ended June 30, 1992, an increase of $16.6 million from the 1991 period. For the first half of 1992, noninterest income was $155.7 million, up from $120.6 million in 1991. As a consequence of a restructuring of the investment portfolio, the 1992 half-year figures included gains of $20.5 million on the sale of investment portfolio securities. This restructuring entailed divestiture of portfolio securities of selected maturities to reduce vulnerability to changes in interest rates, as well as the divestiture of securitized mortgage loans. The balance of the increase in non-interest income represents steady growth in both loan and deposit related fees as well as income from newly introduced products such as annuities.
 Operating expenses were $195.8 million in the second quarter of 1992, compared with $189.4 million reported in the second quarter of 1991. For the six months ended June 30, operating expenses were $387.2 million, compared with $381.9 million in the 1991 period. Excluding the cost of foreclosed assets, operating expenses were virtually flat in both periods compared with 1991. This reflects the continued benefits derived from the consolidation of operations and staff functions, which have resulted in a seven percent reduction in personnel since June 30, 1991.
 The provision for income taxes was $16.0 million in the second quarter of 1992, compared with $2.0 million in the second quarter of 1991. For the six months, the provision was $33.5 million in 1992, compared with $3.5 million in 1991. However, because of improved earnings, NatWest Bancorp recorded an extraordinary tax credit of $14.5 million and $28.8 million for the quarter and six months, respectively. These represent the recognition of a portion of previously unrecorded Federal tax benefits on losses which were incurred in earlier periods. These benefits could not be recognized until NatWest Bancorp had achieved sufficient taxable income to realize them.
 Equity capital at June 30, 1992 was $1,771.8 million. Risk-based capital ratios were strong, with a Tier 1 ratio of 6.71 percent and total capital ratio of 11.34 percent.
 NatWest Bancorp is a wholly owned subsidiary of National Westminster Bank Plc, the London-based international banking and financial services organization.
 NATIONAL WESTMINSTER BANCORP INC. AND SUBSIDIARIES
 Financial Highlights
 (Dollar amounts in thousands)
 Periods ended Quarter Six months
 June 30 1992 1991 1992 1991
 Net interest income $186,469 $180,453 $363,320 $345,350
 Provision for loan losses 30,500 134,668 61,000 356,575
 Non-interest income 77,189 60,584 155,736 120,637
 Operating expenses:
 Foreclosed assets 13,007 10,018 25,026 18,807
 Other 182,805 179,388 362,200 363,056
 Net income (loss) 35,837 (85,070) 66,101 (275,982)
 Net interest margin
 (as a percent) 3.83 3.77 3.76 3.61
 Return on average equity
 (as a percent) 8.21 -- 7.64 --
 Return on average tangible equity
 (as a percent) 15.85 -- 15.14 --
 At June 30 1992 1991
 Total assets $22,170,774 $21,965,550
 Total loans 14,211,391 15,144,509
 Total core deposits 13,435,090 13,060,528
 Total equity capital 1,771,767 1,796,586
 Allowance for loan losses as
 a percentage of total loans 4.63 4.17
 Non-accrual loans as a percentage
 of total loans 7.92 8.82
 Capital ratios:
 Risk-based capital ratios
 (Per 1992 rules):
 Tier 1 6.71 6.19
 Total 11.34 10.56
 Leverage ratio 5.46 5.43
 -0- 7/9/92
 /CONTACT: Chris Cameris, 212-602-2505 or Tim Connolly, 201-547-7533, both of National Westminster Bancorp/
 (NW) CO: National Westminster Bancorp ST: New York IN: FIN SU: ERN


TQ-TS -- NY008 -- 7748 07/09/92 09:32 EDT
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