Butterfield Bank reported record profits of $134.1 million for 2006 yesterday — an increase of 22.6 percent compared with 2005.

Shareholders will feel the benefit of the bumper earnings as the Bank's board decided to raise the quarterly dividend payment by 4 cents to 48 cents per share.

It was a record-breaking year for the Bank, which hit new highs for interest and non-interest income.

Assets rose to $11.1 billion, largely due to an increase in customer deposits, which increased 22.7 percent year on year to $9.8 billion. And assets under administration also rose 20.7 percent to $123.6 billion.

The Bank, Bermuda's oldest financial services firm, has expanded internationally over the years and has a presence in the Cayman Islands, Barbados, Guernsey, Switzerland, the Bahamas and the UK.

Alan Thompson, the Bank's president and chief executive officer, said outward growth would continue with the expansion of fund administration business into Canada.

"We are pleased with the strong growth in our financial performances across the Group in a challenging and competitive environment," Mr. Thompson said.

"In all our jurisdictions we have focused on the successful implementation of our business strategy."

Mr. Thompson paid tribute to the "creativity, commitment and enthusiasm" of the Bank's employees.

Total revenue at the Bank's Bermuda operation increased year on year by $27.1 million (13.6 percent) to $227.3 million, while strong loan growth was reflected in a 12.2 percent increase in net interest income from community banking to $114.9 million. It also made a record net income of $65.3 million, accounting for nearly half of the Group's profit.

The Caymans unit also had a bumper year, posting record profits of $53.4 million, up 16.5 percent on 2005.

The Barbados operation was the only unit not to announce improved results compared with last year — its profit was $1.0 million, down from $1.4 million. But this was put down to increased investment in infrastructure in response to growing business, as revenues, assets and customer deposits all rose.

The Bank's Guernsey unit registered a $10.7 million profit — an increase of $3.5 million compared with 2005. There was strong growth in private client business, including deposit and loan volumes.

And the UK operation, which made a loss of $300,000 in 2005, swung to a $700,000 profit in 2006, as its total assets increased to $2 billion, thanks to growing customer deposits and loans.

The increased dividends will be paid out to shareholders on March 7 to shareholders of record on February 21.

Richard Ferrett, the Bank's executive vice-president and chief financial officer, said: "Our financial results in 2006 continue to reflect the soundness of the Group's business model.

"Revenues, earnings per share and return on equity all grew strongly and the return on equity, at 24.6 percent, remains above our target to achieve a return of over 20 percent.

"Significant increases were seen in the Group's revenue generation, which increased by 16.9 percent to $415.1 million, and in customer deposits and loans.

"Particularly pleasing was the 15.6 percent growth in revenues from investment and pension fund administration services and a $21.2 billion increase in assets under administration to $123.6 billion."

Shareholders' equity increased year on year by 11 percent to $549.6 million, while diluted earnings per share were $4.60, up 19.5 percent on 2005.

The Bank also announced that its Stock Option Trust had purchased $25.1 million worth of Bank shares in 2006 in order to satisfy its current and future obligations under stock option plans for executive officers and employees.

The Bank's loan portfolio increased by 21.9 percent to $3.8 billion, while net interest income was $218.2 million, up by $32.9 million on 2005.

The Group's non-interest income rose 12.5 percent to $193.7 million, reflecting strong growth in revenue from investment and pension fund administration.

Last year, the Bank's profits also rose by more than 20 percent.