Butterfield Bank yesterday posted net income of $34.7 million for the third quarter 2006, up 13.1 percent a year earlier as strong revenue growth offset jumps in expenses and staffing.

The result brought year to date net income to $101.6 million, a 19.5 percent increase year on year, and made it almost certain that the bank would surpass full year net income in 2005 of $109.4 million.

Earnings per share were $1.18, up 11 cents year on year and up two cents on the previous quarter, and the bank also announced a dividend of 44 cents per share, which it said was a ten percent increase when its recent one for ten share dividend was taken into account.

“In a challenging and highly competitive business environment, both in Bermuda and overseas, our tested strategy continues to deliver solid financial results and the Group’s core businesses continue to perform in line with expectations,” said chief executive officer Alan Thompson.

“Our Bermuda businesses continue to do well, in particular the Community Banking division has demonstrated significant growth.”

Mr. Thompson said strong performances were also seen from the Bank’s operations in the Bahamas, Cayman and Guernsey businesses.

Richard Ferrett, executive vice president and chief financial officer, said: “It is pleasing to note that at the nine month stage this year net income now exceeds $100 million, at $101.6 million, compared to $109.4 million recorded for the whole of 2005.”

“In addition, our return on equity continued to remain above 20 percent throughout 2006. Significant year on year increases were seen in the Group’s revenue generation, with net interest income increasing by 15.7 percent.

Mr. Ferrett said this reflects strong growth in customer deposits particularly in Bermuda, and non-interest income increasing by 10.1 percent

During the quarter the Group made provisions for credit losses of $0.6 million, reflecting growth in the Barbados, Bermuda, and Cayman loan portfolios, compared to $0.3 million a year ago.

Total revenue grew year on year by $14.6 million, or 15.9 percent, to $106.1 million, whereas total operating expenses increased year on year by $10.0 million, or 16.5 percent, to $70.4 million.

Personnel-related expenses increased by $5.3 million, up 14.3 percent year on year, reflecting an increase in the headcount, which has risen from 1,599 a year ago to 1,695 to support business growth, particularly in Bermuda, Cayman and The Bahamas.

Total assets of the Group as at 30 September 2006 were a record $10.6 billion, compared to $8.9 billion a year ago.

In Barbados, total revenues at $3 million were in line with that seen a year ago, whilst net income, at $100,000, was down from $500,000 recorded a year ago reflecting increased investment to support business growth. Total assets now stand at $228 million, up 21.9 percent year on year.

Cayman recorded net income of $13.7 million, up year on year by $2.3 million, or 20.1 percent, reflecting continued strong business growth and the contribution from the Bank’s equity interest in Island Heritage Insurance.

Total revenue, at $25.2 million, was up 23.9 percent, reflecting strong growth in revenues from investment and pension fund administration and banking activities.

Guernsey’s net income, at $2.5 million, is up $0.6 million, or 32.0 percent, year on year, reflecting strong revenue growth in net interest income and fees from investment and pension fund administration and banking activities.

The Bahamas achieved net income of $500,000 on revenues of $2.3 million, up from $400,000 and $1.7 million respectively a year ago, reflecting growth in fees from trust and fund administration services and a 122.6 percent increase in net interest income.

In the UK total revenues increased year on year by 4.8 percent to $5.9 million, reflecting growth in net interest income.

A post tax loss of $38,000 was recorded for the quarter compared to net income of $139,000 a year ago.

Total assets were $1.7 billion compared to $1.2 billion at the same stage a year earlier.