HSBC Bermuda recorded a $221 million profit before tax during 2009, despite the impact of the economic downturn and continued low interest rates squeezing margins.

That figure decreased 36 percent compared to the previous year, while consolidated total operating income of $633 million for last year represented a nine percent decrease versus 2008.

But total assets were up five percent at $10.76 billion year on year.

The results come a day after rival Butterfield Bank announced a $213 million loss for last year.

Michael Schrum, chief financial officer of HSBC Bermuda, said: "2009 has clearly been a challenging year for the bank and its customers, both globally and here in Bermuda. It has been a year characterised by pressure on profitability as a consequence of a slowdown in economic activity, continued low interest rates, causing some margin compression, and ongoing volatility in equity and bond markets which has impacted our investment-related businesses.

"In spite of difficult market conditions, HSBC Bermuda has continued to deliver resilient financial results with a robust and growing balance sheet and strong capital base."

Consolidated net operating income was down 23 percent on 2008 at $518 million for the year ended December 31, 2009.

However total loans and advances to customers increased by $542 million or 22 percent compared with the prior year, while performance of the portfolio remained strong, and advances to deposits ratio of 37 percent over the same period represented an increase of six percent versus 2008.

Total customer accounts rose by $297 million or four per cent compared with the previous year, with the bank's total capital ratio dropping to 21 percent by the end of 2009 compared to 25 percent at the end of 2008.

Meanwhile, in September 2009, Standard & Poor's issued an updated rating indicating that the bank continues to maintain a 'AA-' rating.

Philip Butterfield, CEO of the Bank of Bermuda Ltd., said: "HSBC Bermuda continues to benefit from integration with other parts of the HSBC Group, which allows the bank to offer a world class value proposition to customers. We have been able to build on Bermuda's international connectivity and offer our customers integrated solutions to their financial services needs.

"We were pleased to be recognised for the third successive year by The Banker magazine as the 'Bank of the Year' in Bermuda. We also solidified our position as the highest rated bank in Bermuda when Standard & Poor's reaffirmed the Bank's credit rating of 'AA-', recognising our strong competitive position in the local market.

"2009 saw significant market challenges and we met these challenges and took the opportunity to strengthen further our long-standing partnerships with existing customers, as well as welcoming new customers to the HSBC banking experience.

"I would like to thank our customers for their continued support and confidence in the Bank and our staff for their contribution and commitment. We are well-positioned, with excellent liquidity and a conservative balance sheet, to continue gaining momentum in 2010."