The amount of money Bermudians and residents are putting into the Bank of Bermuda has gone up by just over four percent for the last quarter of 2000.

In the four months ended December 31, 2000, the bank saw cash and deposits at $4.9 billion, up $0.2 billion on the same period last year.

The bank attributed this increase in the growth in customer deposits to a rise in investment in marketable securities.

Loans, less allowance for loan losses, of $1.5 billion were unchanged from a year earlier.

Total revenue from core operations at the bank increased by 12.3 percent with healthy increases in both net interest income and fee-based revenues.

Non-interest income for the quarter of $65 million was up 14.6 percent compared with $56.7 million a year earlier.

The most significant driver of revenue growth was foreign exchange earnings, which increased by over 50 percent from $8.0 million to $12.5 million as a result of heightened client activity following the turnaround of the Euro and during periods of increased stock market volatility. Global Fund Services fees were up 9 percent to $26.7 million, from $24.4 million last year, with strong performance in North America and Europe partly offset by a small decline in the Far East, where the focus has been on preparing to service the new Mandatory Provident Fund business, revenues from which commence at the start of the 2001 calendar year.

Private Trust fees of $8.1 million were slightly lower than $8.5 million a year earlier as the bank said improvements in Europe and the Far East did not offset lower income in the Americas, where record revenues were reported in the same period last year.

Investment Services revenue softened slightly from recent quarters as a result of market declines but, nonetheless, was 9 percent higher than a year ago at $10.9 million.

Banking services fees of $6.5 million were 15 percent higher than the same quarter last year due to improved credit card, loan and banking fees in Bermuda, the bank added.

Net interest income grew $8.4 million, or 19.3 percent, driven by improved volumes and margins. Growth in client deposits was reported across the bank's operating regions with additional deposits from Global Fund Services clients contributing significantly to the increase. Higher margins were generated by a more productive asset mix and improved liability pricing. Amounts provided for bad debts were $2.1 million for the quarter compared with $(0.2) million for the same quarter last year as the bank increased provisions for commercial loan exposures.

Investment and other income was negative $9.1 million, reflecting the investment write-down, as compared with income of $2.6 million in the same quarter last year.

Operating costs were 6.8 percent higher than a year earlier with the increase concentrated in areas of investment in new business opportunities. Salaries and staff related costs were the primary driver of higher costs, producing 72.5 percent of the total increase. Of the increase in staff and related costs of $3.8 million, $3.2 million, or 84 percent, was generated in Hong Kong and was largely due to increased head count in preparation for the new Mandatory Provident Fund business.

Total balance sheet assets at 31 December 2000 were $11.4 billion compared with $10.2 billion a year earlier. The bank's balance sheet assets are derived from the reinvestment of customer deposits, which grew across all our geographic regions over the past year.