its mark on the Bank of Bermuda, reports Ahmed ElAmin . But bank chief Henry Smith believes the organisation will still enjoy long-term growth.

Bank of Bermuda Ltd. yesterday announced diluted earnings of $15.1 million for the quarter ended December 31, up 14 percent over the same period in 1997.

The bank made per share diluted earnings of 70 cents, compared to 62 cents a share in the second quarter the previous financial year.

The growth brings net income for the six months to $32.3 million. The bank stated that revenue growth was hurt by depressed earnings from some fee based lines of business, especially corporate trust, due to the effects of volatile market conditions.

The downturns in the economies in the Far East and the Americas had the biggest impact on the bank.

President and chief executive officer Henry Smith said even with the problems the company's strength in the corporate trust market positioned it for long-term growth.

"New business opportunities continue to arise and, in the long-term, should compensate for the recent pressure generated by stock market volatility and redemptions from mutual funds under our custody,'' he stated in a Press release. "We have also taken important steps to develop our retail banking and private client businesses in the current quarter with our acquisition of Bermuda Home Ltd. and participation in the creation of a new private bank in Switzerland.'' The bank is in the process of completing a $15.25 per share buy out of deposit company Bermuda Home, valuing the company at $83.8 million. The bank already owned about 25 percent of Bermuda Home's common stock and 26 of the preferred stock before the buy out offer.

The bank reported total revenue of $82.2 million for the second quarter, an increase of 12 percent over the same period in the previous financial year.

Increases in interest earnings compensated for declines in fee based revenues.

Total non-interest income fell $4.2 million or eight percent from second quarter ended December 31, 1997. Growth in private trust, investment services and banking services fees was "more than'' offset by declines in corporate trust and foreign exchange fees, the bank reported.

Market volatility led to mutual fund redemptions and a slowdown in mutual fund launches. The effects led to a decline in the value of corporate trust assets under administration.

The value of corporate trust assets under administration led to a decline in corporate trust fees, the largest component of the bank's fee revenue.

Corporate trust revenue declined $6.2 million to $18.6 million during the quarter compared to the quarter ended December 31, 1997.

Corporate trust fees from the Far East were down $2.2 million. Corporate trust fees from the Americas fell $3.4 million.

Bank's earnings increase Fees from private trust business was $7.3 million compared to $6.5 million in the comparable period 1997.

Investment services fees were $8 million, 17 percent higher. Banking services fees increased 13 percent to $4.9 million.

As at December 31, 1998 the bank had assets of $9.6 billion, down from $10.4 billion a year earlier. The bank reported that total assets at December 31, 1997 were higher due to some significant short-term deposits received before the reporting date.

Customer deposits were $8.9 billion, down from $9.8 billion a year ago. Total shareholders' equity increased 12 percent to $465 million at December 31, 1998.

CONFIDENT -- Henry Smith