Second Quarter Results
for the six months ended September 30, 1996
A new direction for Alberta Treasury Branches
Alberta Treasury Branches has a proud history as an Alberta financial institution. Throughout its history, ATB has shown that it believes in Albertans, believes in Alberta business and believes in a strong future for the province.
The banking business is becoming increasingly competitive. New markets, new products and new ways of responding to customers' needs are motivating financial institutions to change rapidly to stay in front of their competitors. ATB is no different. We have a strong tradition and we must prepare for the future.
As outlined in ATB's Business Plan approved by the Board of Directors, throughout the coming year actions will be focused on five key areas:
- organizing for success,
- positioning ATB as the provider of choice,
- having the best people,
- ensuring the continued integrity of the balance sheet,
- putting good management information services in place.
The financial and operational effects of this re-investment in the organization will impact ATB's operations and financial results throughout the remainder of this fiscal year and will be reported as they occur.
Results for the six months ending September 30, 1996 are:
- Net income of $3,434,000 for this period, compared to $16,523,000 for the same period last year.
- Net interest income decreased by $1.8 million. This is due to a decrease in loans from September 1995 to September 1996, and is partly offset by an increase in net interest spreads.
- Provision for credit impairment has increased to $40 million during this period as a result of ATB's efforts to strengthen the balance sheet. This charge is $8.3 million greater than the charge for the same period last year.
- Other income is $31.7 million for the period, up by 5.9% from September 1995. We continue to achieve increases in other income through higher transaction volumes, without increasing fees and charges to our customers.
- Non-interest expenses total $106.3 million, which is 4.6% higher than the same period last year. We continue our commitment to improve our financial service delivery systems through the introduction of new technology and branch automation.
top of page...
Trust is fundamental to the success of any financial institution and trust comes from having confidence that the balance sheet is secure. The specific actions that will be taken to ensure that the integrity of the balance sheet continues are:
- establish clear segregation between loan granting and collecting;
- establish a separate Credit Asset Recovery Team to take action on all non-performing loans;
- continue our review of the management of major non-performing loans and past lending practices to ensure the adequacy of provisions for credit impairment; and
- establish policy on loan limits.
In November, the Board gave approval to a new lending policy. Under this new policy, all loans over $25 million are subject to review by the Board's Credit Policy and Risk Management Committee.
With the full support of the Board of Directors, management feels that these actions will secure and help strengthen ATB's balance sheet and most importantly, position us for future growth and success.
Paul G. Haggis
Chief Executive Officer
and Superintendent
Marshall Williams
Chairman of the Board
top of page... |
