showed return on shareholder equity is at its highest since 1987.

And the figures for the period ended March 31 showed net income for the third quarter rose to $9.21 million -- an 18.53 per cent increase on the $7.77 million earned in the same period last year.

But the highly liquid balance sheet showed total assets of $4.38 billion were down from the $4.51 billion reported in the second quarter, or the $4.78 billion recorded at the end of the 1997/8 year.

Earnings for the nine months until March were $27.02 million -- steady on last year's $27.23 million for the same period.

Return on shareholder equity reached its highest level in more than ten years as it crept up to 15.5 per cent compared to 15.2 per cent for the first six months of the fiscal year.

Earnings per share for the quarter increased two cents to 49 cents over second quarter results, and for the nine months to date stand at $1.42.

That figure is the same amount as for the whole of the last financial year for the group's continuing operations -- although taking discontinued operations into account last year it sunk to just 12 cents.

The Bank's securities portfolio now stands at $1.64 billion up $279 million on the same period last year.

President and Chief Executive Calum Johnston said yesterday's results showed "solid improvements in earnings growth'' in line with set targets.

"I am particularly pleased that again we have successfully reduced our expense base from that of the previous quarter reflecting the commitment to improve efficiencies, especially in our Bermuda-based operations,'' he said.

"The group continues to make sound progress in core operations with strong earnings achieved by our Cayman, Guernsey and Davenham businesses overseas and Asset Management and Treasury businesses in Bermuda.'' He said the Bank had installed new management in Hong Kong to engineer acceptable medium-term returns on investment, after a "break-even situation'' was allowed to prevail for too long.

Chief Financial Officer Richard Ferrett said the Bank remained committed to enhancing shareholder value and efficiency.

"This is also evidenced by further improvement in our cost income, or efficiency, ratio to 75.6 per cent at the nine-months stage compared to 76.1 per cent at the half-year,'' he said.

"Average earnings per member of staff through the Group for the first nine months now stands at $24,000 compared to $24,200 for the whole of the last financial year from our continuing operations.''