HSBC Bermuda made a profit of $162 million last year, an increase of $45 million, or 38 per cent, year-on-year.

Once the impact of notable and one-off items were deducted, the adjusted net income was $140 million, up 22 per cent for the year.

Adjusted total operating income, before loan impairment charges, was $280 million, a rise of $8 million due to higher net interest income. Loan impairment charges fell from $19 million to $1 million, and this was attributed to an improved economic environment and a number of recoveries.

Non-performing loans decreased from 17.8 per cent to 14.7 per cent of the bank’s total portfolio. Consolidated operating expenses were $139 million, consistent with 2016.

Mark Watkinson, chief executive officer and director, said: “All our core businesses delivered revenue and profitability ahead of the prior year and the bank’s capital and liquidity potions remain robust.”

He added the strong US economy was likely to have a positive spillover effect for Bermuda’s economy.

Mr Watkinson said: “The recent tax changes in the US have caused some initial uncertainty in the international business sector and this is going to need close monitoring.”

Mr Watkinson added the fight against financial crime remained a top priority for the financial sector in Bermuda.

He said: “While banks across the local market have sought to mitigate the customer impact, the importance of a strong review by the Caribbean Financial Action Task Force later this year to cement Bermuda’s reputation as a top-quality financial centre cannot be overemphasised.”

HSBC Bermuda’s total assets at the end of 2017 were $9,027 million, a drop of 7 per cent year-on-year, while total loans and advances to customers were in line with the previous year at $2,281 million.

One-off and notable items last year, which the bank said were not reflective of its underlying performance, included a $22 million gain on sale of an equity shareholding to another member of the HSBC Group, a $55 million increase in legal provisions recorded in operating expenses for last year and $23 million from four months of contribution and the gain on sale of its private banking operations, included in the profit for 2016.