HSBC Bank Bermuda Ltd posted net profit of $48 million in 2014, up $3 million from 2013, the bank said today.

Revenue also climbed to $261 million, an increase of $19 million, or 8 per cent from the previous year.

Net profit from operations in Bermuda was $71 million, up by $29 million, or 71 per cent from the previous year.

The bank sold off parts of its corporate and retail banking business in the Cayman Islands to Butterfield Bank during last year, which incurred restructuring costs and a goodwill writedown.

The bank improved efficiency during the year, trimming operating expenses by $7 million, or 4 per cent, to $193 million. The biggest savings were made in employee compensation and benefits, which fell by $7.35 million, or 6.2 per cent, to $110.8 million.

The bank’s loan book contracted by 5 per cent to $2.94 billion, as demand for new loans from qualified borrowers remained weak.

Non-performing loans — 90 days or more past due — comprised 17.4 per cent of total loans, as significant numbers of borrowers struggled to make payments. But that was an improvement on 2013’s 20.7 per cent.

The bank took loan impairment charges of $64.4 million, just over half of the 2013 charge, but still at an “elevated” level, according to the bank’s chief financial officer Michael Schrum, who said the charges represented “a prudent response to continued stress in the commercial and residential property markets as well as higher delinquency levels”.

The bank’s capital adequacy ratio — a measure of its financial stability — climbed by two percentage points to 24 per cent, far above the level required by regulators.

Chief executive officer Richard Moseley described the bank’s results as “resilient”. He added: ‘We have spent much time with many individuals and businesses to help our customers mange through these difficult times.”

The Cayman sale means that all of the bank’s continuing operations will be based in Bermuda. It was also the major reason why total assets on the balance sheet fell by more than 19 per cent to $11.46 billion.

“We have discontinued our banking business in Cayman and relinquished our primary banking licence at the end of last year,” Mr Moseley said. “This represented a major part of the reduction in total assets, as we now focus our efforts on the Bermuda market.”

HSBC Bermuda is part of parent company HSBC Holdings’ global banking network.

“Our Global Banking and Markets franchise had a particularly strong performance through collaboration with our colleagues in the US as we continued to win lead management roles for a number of debt capital financing transactions,” Mr Moseley said.

“We also continue to assist Bermuda global insurance clients with management of their cash flow and non-US dollar catastrophe claims by providing relevant products and foreign currency accounts, both here in Bermuda and globally.

“The insurance-linked securities market in Bermuda saw strong growth in 2014 and we have been able to support this growth through strong collaboration with our colleagues in the US.”