Bank of Bermuda's net profits rocketed by more than 20 percent last year, the HSBC-owned institution has announced.

The bank's consolidated net profit for 2008 soared to $348 million, up 21 percent compared to the previous year, when the bank made $287 million.

Chief executive officer Philip Butterfield said he was "very proud" of the bank's performance during a challenging time for the financial sector.

"I am pleased to report that we have continued to maintain our double-digit growth from our diversified banking and insurance operations, especially during this past year of global economic turmoil," Mr. Butterfield said.

The bank's Bermuda-based operations contributed the bulk of the group's earnings. Banking business on the Island produced a net profit of $227 million — up 20 percent on 2007 — while its insurance business here contributed $81 million.

Overseas operations, primarily group private banking trust business added $40 million in profits.

Residential mortgages on the bank's books soared by $194 million, or 16 percent last year.

Net operating income also rose by five percent to $670 million, including $458 million from Bermuda-based banking operations and $110 million from the Island-based insurance business. Overseas operations contributed $102 million.

The bank recorded a $40 million gain on the sale of its Singapore operations to an affiliated company. "This concludes our five-year planned integration of Bank of Bermuda overseas operating entities into HSBC Group entities in the relevant jurisdictions," the bank said in its earnings statement. The bank's total assets fell $434 million, or four percent, in 2008 to $10.26 billion.

"The bank maintains a strong balance sheet with predominantly high-quality, liquid investment assets and a significant, well-secured mortgage portfolio," Mr. Butterfield said.

The bank maintained its AA- rating from Standard & Poor's during 2008 and its HSBC (Insurance) Ltd. subsidiary kept its AA rating. The Banker magazine chose Bank of Bermuda as the Island's top bank for the second successive year, based on financial performance, strategic initiatives, innovation in technology and community investment.

"I would like to take this opportunity to thank our customers, for their continued loyalty and support, and our staff, for their commitment and contribution to the bank's continued success," Mr. Butterfield added.