HSBC Bermuda’s value to the global banking group was underlined by a 38 per cent improvement in profits during 2017.

The full-year results also give an insight into Bermuda’s economic activity and confidence levels. The bank’s non-performing loans dropped from 17.8 per cent to 14.7 per cent of its book, residential mortgages were steady, and personal loans for items such as boats, cars and bikes were up 24 per cent.

“Small business loans were up about 40 per cent; that’s an encouraging sign,” said Mark Watkinson, chief executive officer and director of the bank. “We are seeing an uptick in international business and we are growing our retail business.”

He has been at the helm of the bank for two years, and he described the 2017 results as strong, with all lines of business up from prior years. Mr Watkinson said there has been a “nice recovery of the business” with more resilience in the local market.

HSBC Bermuda kept its staffing levels stable, even as it reduced operating costs by about 5 per cent.

The bank reported full-year net income of $162 million, an increase of $45 million. 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.

Loan impairment charges fell from $19 million to $1 million, and this was attributed to an improved economic environment and a number of recoveries.

Phil Alvey, chief financial officer, said the bank’s revenue had increased by 3 per cent.

When asked for thoughts on the Bermuda Government’s Budget, announced last month, Mr Alvey welcomed the focus put on the tax base of the economy, while Mr Watkinson described it as “balanced” and said things of particular interest included the proposed raising of building height restrictions in the Hamilton Economic Empowerment Zone, and changing the 60:40 rule that restricts the level of overseas ownership allowed in many businesses.

Mr Watkinson said: “If we are to make the economy grow, we have to look where to start. Sixty-forty is a somewhat contentious issue; when Bermuda was performing well, I could understand the desire for some ring-fencing of businesses.”

But he noted that times change, and for some older business owners now looking to sell their business because they had no family succession plan, a relaxing of the 60:40 rule could be helpful.

David Burt, the Premier, also announced in the Budget that there would be consultation on expanding the types of banks that can operate in Bermuda. Details are scant, however Mr Watkinson believes it would be positive if it meant attracting quality banking sector brands to the island.

“From my perspective, I would welcome it. If we could persuade JPMorgan, Wells Fargo, and Citigroup to open shop here that would be a good thing; they are strong brands that would add credibility to our market,” he said.

HSBC Bermuda’s adjusted total operating income in 2017, before loan impairment charges, was $280 million, a rise of $8 million due to higher net interest income. Its consolidated operating expenses were $139 million, consistent with 2016.

The bank has issued credit card customers with cards that include an integrated circuit on a chip, which is a card authentication security feature widely used in many parts of the world. The bank is moving to introduce the same technology to its debit cards.

Another technology introduced is Touch ID, which uses fingerprint or facial recognition to give customers access to mobile banking on iPhone 5S and newer models.

Beyond its core operations, the bank and its staff engage with the local community, most significantly supporting The Eliza DoLittle Society, which helps those in Bermuda who are “food-insecure and hungry”. The partnership between HSBC Bermuda and Eliza DoLittle has been in place for two years, and in the last three months of 2017, HSBC staff served 1,300 hot meals and distributed groceries to 9,000 families and individuals.

Mr Watkinson said the programme is open to all bank staff, and is conducted on the bank’s time. He added: “We have a 93 per cent participation rate. People can do cooking, serving or food distribution. Last year we served 10,500 meals. We want the staff to feel they are playing a part. It is also a good opportunity for team building and a time for people to relax.”

Looking to the future of the bank in Bermuda, Mr Watkinson said: “If you look at our record, we remain an important part of the [HSBC] group. Our adjusted return on equity is 17 per cent, which is above the 10 per cent target for the group.”

He said the bank was performing well and returning value to shareholders. He added: “For us, Bermuda is a good market.”

Disclosure: the writer owns shares in HSBC.