ATB records its strongest-ever start to a fiscal year

EDMONTON, Nov. 20, 2013 /CNW/ - ATB Financial is off to the best start in the crown corporation's 75-year history, recording a net income of $140.4 million for the first six months of the fiscal year 2013-14. That represents an increase in earnings of over $31.2 million, or 28.6 per cent, from the previous year.

In the quarter ending September 30, 2013, ATB earned a net income of $74.6 million, an increase of $19.6 million, or 35.6 per cent, over the same quarter last year.

The increase in earnings is mostly due to an increase of total operating revenue, which reached $339.2 million in the second quarter, 16.7 per cent more than the $290.6 million generated in the same quarter last year. A 12.1 per cent increase in net loans (up $3.4 billion to $31.8 billion) and a record quarter for ATB Investor Services were among the factors for the significant growth in ATB's total operating revenue.

Retail Financial Services - the largest component of ATB's business - has welcomed over 13,000 new customers since the start of the fiscal year.

Non-interest expenses for the second quarter reached $226.2 million, up 6.9 per cent from $211.6 million during the same quarter last year. However, since operating revenue increased at a faster pace than did expenses, ATB's efficiency ratio - the ratio of non-interest expenses to operating revenue - dropped to 66.7 per cent. That represents an improvement of more than six per cent from last year's second quarter (72.8 per cent).

"I can't think of a better way to celebrate our 75th anniversary than to thank our customers for their confidence and our team members for their hard work, which combined to post our best start to a year ever," said Dave Mowat, ATB's President and CEO.

Operational Highlights

Retail Financial Services - This line of business includes branches and agencies throughout the province providing financial services, including private banking, to individuals. Operating revenue was $118.9 million, an increase of $5.6 million, or 4.9 per cent, over the same quarter last year. During the second quarter, ATB's retail line continued strong client acquisition, positive customer satisfaction results and impressive asset growth.

Business & Agriculture - This line of business provides services to Alberta's small- and mid-sized business, farm and agricultural customers. So far this year combined loan and deposit growth has surpassed $1.0 billion, a result which was not achieved until the end of year last year.  As a result of this healthy loan and deposit growth, operating revenue was $74.2 million, an increase of $4.2 million, or 6.0 per cent, over the same quarter last year.

Corporate Financial Services - This line of business provides services to Alberta's senior-market companies in energy, commercial, and food, forestry and real estate. Operating revenue was $87.5 million, up $14.4 million, or 19.7 per cent, over the second quarter last year. During Q2, Corporate Financial Services launched an innovative Mezzanine Debt Program to complement existing senior debt and related products initially for exploration and production companies. The first transaction under the Program, in the amount of $20 million, closed on September 30th.

Investor Services - This line of business offers its customers integrated wealth management expertise. Investor Services is enjoying its best-ever start to the year. Assets under management reached $9.6 billion during the second quarter. Operating revenue of $25.4 million was up $5.9 million, or 29.8 per cent, from the same quarter last year. As of June 30, 2013, ATB Investor Services is near the top in both the mutual fund gross sales and net new money rankings in Alberta.

ATB In The Community - This was a quarter full of firsts for ATB in the community. As a long-time supporter of the University of Alberta's Camp fYrefly for gay, bisexual and transgendered youth in Edmonton, ATB helped bring the camp to Calgary in July. The Edmonton International Fringe Theatre Festival broke new ground for ATB later in the summer, including earning the naming rights for the iconic Arts Barns. The Tour of Alberta created excitement all over the province, and ATB was visible throughout with the ATB Financial Autograph Alley. In September, ATB announced our partnership with Easter Seals Camp Horizon in Bragg Creek, Alberta, supporting camp experiences for Albertans with disabilities. And ATB announced its annual Teddy for a Toonie campaign raised a record $825,000 across the province for the Stollery and Alberta Children's Hospitals.

About ATB Financial - ATB Financial is the largest Alberta-based financial institution, with assets of more than $35 billion. ATB provides personal, business, agriculture, corporate and investor financial services to Albertans in 242 communities. ATB was established in 1938 and has been a provincial Crown corporation since 1997. ATB has won numerous national workplace awards, including recognition as one of Canada's best 50 employers.

For details on ATB's 75th anniversary celebrations, visit wearealberta.ca. For complete second quarter financial results, including Management's Discussion and Analysis, please visit atb.com.

ATB FINANCIAL                      
FY 2014 Q2 HIGHLIGHTS                      
                       
    For the three months ended     For the six months ended
    Sept 30   June 30   Sept 30     Sept 30   Sept 30
($ in thousands)   2013   2013   2012     2013   2012
Operating results                      
Net interest income $ 241,943 $ 231,821 $ 221,706   $ 473,764 $ 428,326
Other income   97,288   92,924   68,870     190,212   152,911
Total operating revenue   339,231   324,745   290,576     663,976   581,237
Provision for credit losses   16,144   16,632   7,519     32,776   12,053
Non-interest expenses   226,220   222,618   211,616     448,838   427,360
Net income before PILOT   96,867   85,495   71,441     182,362   141,824
Payment in lieu of tax   22,279   19,664   16,431     41,943   32,619
Net income  $ 74,588 $ 65,831 $ 55,010   $ 140,419 $ 109,205
                       
                       
Financial position                       
Net loans $ 31,786,913 $ 30,682,145 $ 28,356,304   $ 31,786,913 $ 28,356,304
Total assets $ 35,218,660 $ 33,741,492 $ 32,704,492   $ 35,218,660 $ 32,704,492
Total deposits $ 24,947,812 $ 24,083,077 $ 23,088,892   $ 24,947,812 $ 23,088,892
Equity $ 2,417,594 $ 2,310,981 $ 2,152,747   $ 2,417,594 $ 2,152,747
Key performance measures (%)                      
Return on average assets   0.86   0.78   0.68     0.82   0.69
Return on risk weighted assets   1.18   1.08   0.94     1.13   0.95
Operating revenue growth    16.7   11.7   5.7     14.2   5.8
Other income to operating revenue    28.7   28.6   23.7     28.6   26.3
Operating expense growth   6.9   3.2   3.7     5.0   6.2
Efficiency ratio    66.7   68.6   72.8     67.6   73.5
Net interest spread   2.9   2.9   2.9     2.9   2.8
Credit losses to average loans   0.21   0.22   0.11     0.21   0.09
Net impaired loans to total gross loans   0.14   0.22   0.30     0.14   0.30
Net loan growth1   12.1   11.8   8.0     12.1   8.0
Total asset growth1   7.7   5.4   3.8     7.7   3.8
Total deposit growth1   8.1   5.1   3.2     8.1   3.2
                       
1 Measures are calculated by comparing current quarter balances against the same quarter of the previous year.
 

 

 

SOURCE: ATB Financial

For further information:

Barry Strader
Corporate Reporter
ATB Financial
(780) 886-4398 (cell); (780) 495-1343 (office)
email: bstrader@atb.com


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