Butterfield Bank last night reported a nine percent jump in profits for the third quarter with net income of $23.8 million.

In round dollar amounts, Bermuda's oldest bank said its income for the three month period ended September 30 had grown by $2 million compared to the same period last year.

Butterfield said its Bermuda business accounted for a good portion of its growth in income with that book increasing by $6.6 million, or 48.3 percent to $20.2 million in earnings. This was said to reflect significant business growth in the retail and corporate banking, wealth management & fiduciary services and investment & pension fund administration services businesses, together with the loan recovery.

In total, Butterfield said its Bermuda-based loan portfolio had increased year on year by 11.5 percent.

Broken down per share, earnings stood at $1.06 ? up 24 cents, or 29.3 percent, over the same period last year.

For the first nine months of 2004 net income of $71.7 million was recorded, a surge of 27 percent, year on year.

The bank's CEO and president Alan Thompson said in an earnings statement: "Butterfield Bank has once again delivered solid financial results and our core earnings remain strong."

CFO Richard Ferrett added: "Our business model continues to prove effective, with the quarter seeing record total income of $82 million, up 36.1 percent year on year, reflecting significant increases in revenues achieved from our wealth management and fiduciary services and investment and Pension Fund Administration businesses.

"In addition, for the sixth consecutive quarter the group's return on equity (ROE) exceeded 20 percent, at 21.8 percent."

On the expense side, Butterfield said its total operating expenses jumped by $18.4 million to $58.1 million.

This included a surge in operating expenses after several strategic acquisitions in the UK and Caribbean were closed by the bank. In total, costs for acquired companies accounted for $7.9 million, or 43.3 percent, of the year on year increase, in line with expectations. The remainder of the increase primarily relates to higher employee related costs, reflecting an increase in headcount in Bermuda and Cayman due to business growth and the increasing cost of healthcare in Bermuda, the bank said.

The bank said its employee numbers had increased year on year, from 1,259 at the same time last year to 1,575 at the end of the quarter, primarily due to acquisitions. But the number also reflects a headcount reduction of 41 compared to staffing levels at 30 June 2004 because of 'efficiencies' being achieved on the integration of the Leopold Joseph businesses in the UK and Guernsey.

Mr. Thompson also issued an update on the bank's situation in the hurricane-battered Cayman Islands, where Butterfield has a significant presence on the banking side, and as a minority shareholder in one of the Island's domestic insurance companies.

"The Cayman Islands suffered severe damage in September as a result of Hurricane Ivan. Our business continuity plans ensured that we were able to service all our Cayman clients from other locations immediately following the storm. The phenomenal work of our employees in Cayman meant that we were already offering a full banking service on the island only a few days after the Hurricane struck and we are now playing a significant role in restoring the economy. Our thoughts and prayers continue to remain with our employees and the people in Cayman who are still affected by the impact of the Hurricane," Mr. Thompson said.

Investors can expect to receive the same quarterly dividend of 38 cents per share, which is to be paid out on 15 November to shareholders of record as of 2 November.

A '1 for 10' stock dividend in August actually means that shareholders are seeing a ten percent increase in their quarterly dividend, the bank said yesterday.