income, from $14.1 million to $17.9 million, for the fiscal year to September 30, compared to figures for 1994.

The bank, which a week ago reported net income at $1.62 million, said in their annual report, released yesterday, that expenses climbed during the same period by 24 percent from $13.1 million to $16.2 million. And more staff will have to be added during this fiscal year to deal with an increase in the volume of business.

The financial report described the year as having been a "considerable success for the bank'' reflecting "the hard work of a dedicated team'' over the last four years, resulting in significant growth and profitability.

One example is International Corporate Management, which posted another year of considerable growth, increasing mutual fund assets under administration by $100 million to $800 million during the year.

The department's total revenues increased by 41 percent, going over the million dollar mark for the first time.

The report added: "We were also successful in containing costs in spite of the new Corporate Services Tax of four percent on gross revenues, which was introduced April 1, 1995. As a result, the growth in revenues largely carried through to the bottom line with net operating income increasing by 38 percent.

'' The bank's financial statement generally reflected continued development of fee-driven, low risk business. It was marked by relatively small lendings, coupled with a substantial increase in fee income from the corporate management group and the global custody department.

The bank believes it is positioned now to garner larger market share after a successful rights offer that more than doubled the bank's capital base; an international rating from Thomson BankWatch of New York; the opening of the first overseas subsidiary in Mauritius; new software products; and the launch of BCB Merrill Lynch Asset Management, a joint venture with the giant US investment advisor.

Other efforts included the introduction of BCB GOLD (Global On-Line Data), the cash management product. BCB GOLD, a Windows-based cash management system provides clients the ability to access account balances and to initiate fund transfers, as well as the ability to communicate with the bank on a "real-time'' basis.

Phase two was scheduled to be introduced this quarter, allowing clients to access portfolio valuations including transaction details and initiate trade requests or settlement notifications using the system.

The Island's third bank is concentrating on local business, while the other two are focusing internationally.

Increased service, competitive interest rates, the impact of BCB GOLD and flexibility in international transfers have resulted in a growth in customer deposits at the bank, up by 10 percent.

Commercial Bank shares rose 50 cents to $5.50 on the Bermuda Stock Exchange yesterday.

The trade, on volume of 3,000 shares, failed to offset declines in other shares, as the BSE Index slumped 3.76 points to 980.27.

Bank of Bermuda closed down 25 cents at $17.625 on volume of 1,438 while Belco dropped 12.5 cents to close at $19.875 on volume of 287. Share volume was 5,685 with a value $83,200.75. Chart: Page 14 .