News Release:

February 19, 1997

Alberta Treasury Branches - Third Quarter Report
For Immediate Release

The Board of the Alberta Treasury Branches (ATB) has reviewed and approved third quarter results for the year ending March 31, 1997. The third quarter report reflects information already provided by the Provincial Government in its third quarter report released with Budget 97. Results for the third quarter show a projected loss for the 1996/97 fiscal year of $23.3 million, due primarily to the current review of major non-performing loans and one-time restructuring costs.

Alberta Treasury Branches will continue its review of major non-performing loans and past lending practices, as announced on November 26, 1996. This process will ensure that ATB's loan portfolio continues to be valued appropriately. The results of this review to December 31, 1996 confirm the continued conservative nature of our balance sheet by adding an additional $48.3 million to our provisions for credit impairment. This results in a net loss of $18,857,000 to December 31, 1996. An Asset Recovery team consisting of highly-trained credit professionals has been formed to take action on all non-performing loans.

The change in strategy by management to lower the risk of our loan portfolio has resulted in a reduction of our loan assets. The effect on net interest income, due to the reduction of loans over the past twelve months, is balanced by increased interest spreads. Net interest income is up $1.2 million from one year earlier, for a total of $178.9 million.

Other income to December 31, 1996 is $48.9 million, up 3.5% from the same period last year. The increases in other income are a result of processing higher transaction volumes without increasing the fees and charges to our customers.

Non-interest expenses totalled $158.4 million, which is a 4.1% increase over the same period last year. The increases are primarily in the areas of branch automation and new technology initiatives used to improve our financial service delivery systems.

Alberta Treasury Branches is well on its way in implementing initiatives included in "A Plan for the Future", the ATB Business Plan which was released in November 1996.

For further information please contact:

Darlene Dickinson
Chief Public Affairs Officer
Alberta Treasury Branches
(403) 493-7307

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