The Island?s financial services regulator, the Bermuda Monetary Authority, saw net income reach $3.19 million in 2004, according to its annual report released yesterday.

The regulatory body?s results were a 33 percent improvement over the $2.4 million in net income it recorded in 2003.

Revenues rose 26 percent to $15.4 million, which the BMA said reflected re-allocation to the Authority of fees for the banking sector that were previously collected by Government.

The BMA, as is common practice, said it would turn over over 50 percent of its net income, or $1.59 million, to Government.

Expenses rose to $12.2 million in the period from $9.8 the year before. The 24 percent increase was largely attributed to rising salaries as the authority grew and laid on more jobs. It currently employs around 70 staff, and it salary bill in 2004 came in at $7.7 million, an increase of $1 million from 2003.

The BMA?s $28 million purchase of a new headquarter building set back its investment-income earning assets year-on-year by 18 percent.

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Investment income declined for the year to $4.7 million from $5.3 million a year before, mainly as a result of the continuing low levels of market interest rates as well as a $300,000 loss related to the sale of investment bonds, the annual report said.

During the year, the BMA received 1,538 applications to set up a Bermuda entity, a 4.6 percent rise over the level seen in 2003.

A total of 1,461 applications were approved, 24 were refused and the balance are still pending.

The net asset value of collective investment schemes licensed in Bermuda reached $158.18 billion in 2004, a 37 percent increase from the $115.84 billion net asset value investment companies held a year prior.

On the insurance side, 83 new insurance license applications were received; 77 were approved. This brought the total number of insurance companies to 1,410 at the end of 2004, a 16 percent decline from the 1,682 insurers licensed to do business in Bermuda in 2003.

BMA chairman and chief executive Cheryl Lister said the BMA had, in 2004, ?devoted a great deal of attention to the development of Bermuda?s financial legislative framework? in the year, as well as ?developing appropriate policy frameworks for supervision?.

An International Monetary Fund (IMF) report released earlier this year was said to have been largely positive on the Island?s regulatory framework, and recommendations that were made were either already underway or ?in large part consistent with the authorities? own previous assessment?, the report said.

One of IMF?s recommendations was that the BMA move to complete operational independence of Government

by amending legislation to remove the Finance Minister?s power to give directions to the BMA and approve its budget.

?These measures would remove the potential intrusion by the Minister on the operational independence of the BMA,? it said.

Yesterday the BMA said the issue of the BMA seeking total autonomy was still under review.