months of fiscal 1993 -- a jump of 28.5 percent on the corresponding period in 1992.

Total revenue increased by 6.1 percent ($4.67 million) to $81.57 million in the half-year to December 31, 1992.

Expenses, on the other hand, were well contained, rising by just 1.1 percent ($772,450) to $63.83 million.

Two areas of revenue -- net interest and investment income -- both fell but fees and other income was up by 25.8 percent ($10 million) to $49.14 million.

Salaries and related costs increased by 8.4 percent ($2.81 million) to $36.33 million, while other operating expenses fell by 6.9 percent ($2.04 million) to $27.05 million.

Total assets increased by 5.5 percent ($331.6 million) to $6.33 billion, compared with total liabilities of $6.02 billion -- a rise of 5.6 percent.

Shareholders' equity went up by 7.4 percent ($17.85 million) to $257.9 million.

Bank president Mr. Donald Lines told shareholders in a newsletter that the higher profit was a result of continuing growth in fee revenues generated by international business in Bermuda and overseas.

"This impressive performance was achieved notwithstanding the decision to set aside $7 million for possible loan losses,'' he said.

"The provision of this $7 million reflects our continuing concern over the possible impact of the downturn in our economy on the ability of local customers to meet their obligations should this decline in activity continue.

"As a result of this provision, loan loss reserves now equal three percent of total loans.'' A $5.4 million decrease in interest earnings and investment income reflected lower earnings on capital and continued downward pressure on margins, he added.

The Bank's risk weighted capital ratio was 15.2 percent, which Mr. Lines said was "significantly above the internationally agreed standard of eight percent and the ten percent rate set for Bermuda''.

Mr. Lines said that although he was optimistic about 1993 he was not getting carried away.

"It will not be an easy year,'' he said. "There are signs of improvement in the economies of the countries from which we draw most of our visitors.

However, all tourists are now extremely price, and value-for-money, sensitive.

"Bermuda will need to be service and price competitive in order to attract visitors in numbers that will make a real difference to the economy. We must all be part of the process to achieve the desired results.

"That will mean teamwork and participation and an honest effort by management, staff and unions to move away from confrontational attitudes of the past to a more co-operative and effective working relationship.'' In order to improve Bermuda's competitiveness on tourism, the Bank of Bermuda had agreed to finance the work of the Tourism Planning Committee, which is looking at ways to promote the Island.

Mr. Lines added: "The Bank's focus for 1993 will be to expand our marketing efforts, continue to control expenses closely and to concentrate on improvement in services provided to customers.''