The Bank of Bermuda executed half of all the transactions on the Bermuda Stock Exchange last year, the bank disclosed in its 1996 annual report to June 30.

It also pointed out that its loan and advances portfolio grew during the year by $99 million to eclipse the billion dollar mark for the first time.

Non-performing loans at June 30 totalled $50 million, down by $9.2 million from last year. Provisions for loan losses amounted to $7.2 million, compared with $5.1 million last year.

As previously reported, the bank's net income totalled $47.4 million, up 12 percent, on revenues of $250 million and after total expenses of $208 million.

Personnel costs alone, including salaries, grew by $12.7 million, while property, systems and communication expenses increased by $5 million.

The bank's risk-weighted capital ratio at the end of fiscal 1996 remained conservative at 15 percent. Return on equity was 13.8 percent, while return on assets increased to 0.61 percent. Book value per share rose $1.50 to $18.02.

Increased customer deposits, climbing by $650 million to $7.5 billion, pushed total assets up $690 million (nine percent) from $7.4 billion to $8.1 billion at June 30.

Worldwide revenue increased by 11 percent or $25.4 million, as growth was achieved across all lines of business and in all geographic regions.

Profits from Bermuda operations improved by 32 percent over last year as revenue was up eight percent mostly as a result of increases in service fees, the source of more than 50 percent of Bermuda revenue.

Net interest earnings were somewhat reduced, although total fee revenue improved 18 percent.

Bermuda revenue attributable to international business activities represented 76 percent of the bank's total. Half of the bank's gross revenue was generated from overseas. Profits from overseas operations were affected by one-time charges.

Outsourcing certain services from the New York office and the rationalisation of the Jersey operations to improve efficiency cost $2.7 million.

The report said there are reasons to be "cautiously optimistic'' about the economic future for Bermuda.

It pointed out the stable inflation rate for 1995 and the marginal growth in Gross Domestic Product (GDP) was largely accounted for by declining visitor arrivals, offset by continued growth in international business that included an estimated five percent increase in spending by international companies.

Weaknesses were revealed in other sectors such as retail, which declined in real terms by 2.3 percent, although the first quarter of 1996 showed that trend reversing.

The value of construction projects put in place during the year was down to $37.2 million, compared with $51.3 million the previous year, although new activity is now strong.

A balance of payments surplus of $71 million last year was a strong increase over the $53 million achieved in the previous year.

The liquidity of banks and deposit companies continued to expand, with the net surplus of local currency deposits, less loans and mortgages, rising to $359 million at December 31, 1995, compared with $348 million at the end of 1994.

The bank said that Bermuda started to focus on business expansion again after the "decisive defeat of the referendum'' on independence a year ago.

The bank is organised into four core groups: banking, corporate trust, private trust and investments.

In the banking sector there have been gains in operating efficiency and a reduction in expenses.