The Bache Group Inc., which owns the big brokerage firm Bache Halsey Stuart Schields Inc., reported a 30 percent increase in fourth-quarter earnings, to $6.5 million (74 cents a share) from $5 million (60 cents) in the three months ended July 31, 1979.
For the full year the company reported a 98 percent increase in earnings to $26.8 million ($3.10) from $13.5 million ($1.65).
The firm's revenues were $162 million in the fourth quarter, up 35 percent over the final three months of the 1979 fiscal year, while for the whole year revenues were $622 million, 44 percent higher than the year before.
Bache's fiscal (or accounting) year ends on July 31.
The company had teetered on the brink of calamity in late March, when the Hunt brothers of Texas temporarily could not pay the debts they owed Bache as a result of their silver speculation. But the Hunts, who incurred the debts when the price of silver fell from nearly $50 an ounce in January to less than $11 in late March, have paid Bache back in full. The Hunts also dealth with many other large firms, to whome they owed debts, and had to mortgage much of their huge financial empire to borrow $800 million to pay off those debts.
The company noted that its record earnings reflected significantly higher provisions for losses on uncollectable accounts an order errors due to the increased volume. The volatile markets, particularly in commodities, and the extension of credit to certain customers having positions in illiquid securities were also factors.
The company reported higher revenues across the board -- including commissions, underwritings and interest income.
Chairman Harry A. Jacobs said that a 10 percent increase in the number of brokers at Bache and a sharp increase in the revenues they generate (called productivity) were responsible for the firm's performance.
During much of the 1970s, Bache had a brokerage force that was less productive than those at many other large publicly traded brokerage firms. As a result, Bache's financial performance also trailed many other brokerage firms.
But Jacobs said today that during the period of 1977 to 1979, while the average broker in the industry had a 24 percent increases in productivity, Bache's brokers had a 40 percent increase.
According to a Securities Industry Association study, half the brokers (or account executives as they are called) generate revenues above $86,000 a year and half generate below that.