Capital G Bank Ltd made a profit of $3.2 million for the year ended December 31, 2011, down seven percent from last year.

The bank said its loan book and net interest income increased as a result of its merger with First Bermuda Group.

Net operating income before loan loss provisions climbed to $58.4 million, representing a 28 percent improvement from $45.8 million in 2010.

Capital G Bank saw a sharp increase in impaired loans, as more borrowers struggled to meet repayments. Total impaired loans were $21 million at the end of 2011, representing 2.15 percent of the loan portfolio. This is up from $5.6 million, or 0.7 percent of gross loans a year earlier.

Chief executive officer Ian Truran said: “Overall we are very pleased with the Bank’s performance in 2011. The weak economy posed significant challenges, especially in respect of loan portfolio quality and appropriate provision levels.

“First Bermuda Group operations have been successfully and smoothly integrated with those of the Bank and we now offer banking services at two locations in Hamilton under the Capital G brand.”