Conformed
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) October 24, 1996
Beneficial Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-1177 51-0003820
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
301 North Walnut Street, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (302)425-2500
No Change
(Former name or former address, if changed since last report)
Item 5. Other Events.
The following is the text of a press release of Beneficial
Corporation, issued on October 24, 1996:
BENEFICIAL CORPORATION REPORTS 13% INCREASE
IN THIRD-QUARTER EARNINGS
- Earnings Per Share Increase 11% to $1.22 -
- Nine-Month Earnings Increase 79% to $257.7 Million -
- A New Record Level -
WILMINGTON, Del. -- Beneficial Corporation (NYSE: BNL) 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 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 anticipation loan (RAL) business, while this year has been
marked by a sharp resurgence 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 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 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 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. 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 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 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 Stock Exchange-listed
financial services 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
BENEFICIAL CORPORATION
(Registrant)
By /s/ Ronald E. Bombolis
Ronald E. Bombolis
Senior Vice President
and Controller
Dated: October 24, 1996
