The Bank of Bermuda has seen a surge in business from Bermuda clients since its sale to multinational banking giant HSBC Plc. two years ago, chief executive Philip Butterfield said yesterday, citing a 41 percent improvement in operating profit from local operations since the 2004 sale.

The profit-surge is largely thanks to growth in interest income, and while expenses recorded by the bank?s Bermuda operations also grew, Mr. Butterfield said the increase was around three percent, or in line with inflation.

?The expectation is that the Bank of Bermuda isn?t a local bank anymore,? said Mr. Butterfield, of perceptions since the bank became part of the giant HSBC network. ?In fact, we are very much a local bank.?

Last year, the bank?s Bermuda operations recorded $200.6 million in interest income, up nearly 50 percent from $134.7 million in 2004. And in 2005, operating profit from Bermuda operations climbed to $124.8 million, up from $80.87 million on an annualised basis in 2004.

Mr. Butterfield said the operating profit figures disclosed yesterday, at a Press conference highlighting the bank?s accomplishments over the past two years, chiselled out the bank?s Bermuda results over the period.

The bank?s operating profit for the ten-month period ended December 31, 2004 was $115.5 million including income from operations the bank held outside of Bermuda.

The figure, in the bank?s 2004 consolidated financial statement, was recorded under UK generally accepted accounting principals, while the bank?s 2005 figures have been compiled under an internationally recognised standard.

The year prior to its sale, the bank posted net income from its operations in 16 financial centres around the world, including Bermuda, of $92.5 million, and $77.7 million in 2002. Net income differs from operating profit in that the latter excludes certain one-time expenses.

During the last ten months of 2004 ? broken down as such because the sale to HSBC took effect at the end of February ? the bank realised a $40.7 million gain after three of its subsidiaries were amalgamated with HSBC companies. The three businesses were Bermuda International (Dublin) Limited, Le Masurier, James & Chin Limited and Bermuda Trust (Jersey) Limited.

In 2005, the bank?s remaining global units ? including its lucrative fund administration foothold in Asia ? were integrated into HSBC?s network, spanning 77 countries and territories.

The bank hasn?t yet disclosed what gain it realised in 2005 from siphoning off the remainder of its global operations. The bank?s 2005 consolidated financial statements are to become available to the public within the next week, Mr. Butterfield said.

The Bank of Bermuda?s surge in income from Bermuda operations contrasts with recent results posted by Butterfield Bank. Butterfield, the Island?s oldest bank, saw its net income grow to a record $109.4 million in 2005 on the strength of global revenues, while profit from its Bermuda operations declined 22 percent.

Mr. Butterfield credits the growth in the Bank of Bermuda?s local business to an ability to attract more business from corporate clients now that the bank can leverage off of HSBC?s much bigger balance sheet, including adding to its client list a string of new reinsurance companies that formed on Bermuda late last year with combined capital nearing $10 billion.

HSBC is one of the world?s largest banks by market capitalisation. The UK-based bank yesterday announced a $15 billion profit for 2005.

In line with increased business in the Bermuda market, the bank has also added some new positions, Mr. Butterfield said, while trimming other positions ruled unnecessary under its new business model. The bank now employs about 1,140 staff in Bermuda, compared to 1,085 Bermuda-based employees at the end of 2004, when the company had an additional 889 workers employed overseas.