Bermuda’s banking sector reported net after-tax income for the fourth quarter of 2022 totalled $136 million, an increase of 38.9 per cent (or $38.1 million) over the prior quarter.

And the latest fourth quarter profit was nearly 150 per cent higher than the 2021 fourth quarter profits of $54.7 million.

Releasing the 2022 figures in its quarterly banking digest, the Bermuda Monetary Authority said the increase over quarter three was primarily driven by the increase in net interest income, which amounted to $191.8 million, a 13.2 per cent (or $22.3 million) increase compared to the prior quarter.

Non-interest income totalled $81 million, up 6.5 per cent (or $4.9 million) from the previous quarter.

Total income amounted to $272.8 million, an 11.1 per cent (or $27.3 million) increase from the prior quarter.

Total expenses for the quarter amounted to $136.1 million, a decline of 7.2 per cent (or $10.6 million) compared to the prior quarter.

The sector’s efficiency ratio improved to 49.9 per cent, down 9.8 percentage points from the prior quarter.

The BMA said banking sector assets increased by 2 per cent (or $0.5 billion) to $26 billion during Q4-2022. This growth is reflected in the increase in interbank deposits (by $0.9 billion) and partially offset by the decline in investments.

It said the banking sector’s capital position remains above the minimum capital requirements and buffers.

At the end of Q4-2022, the risk asset ratio and CET1 ratio were 24.7 per cent and 22.4 per cent, respectively with both ratios 1.2 percentage points higher than the previous quarter. Additionally, the leverage ratio steadily improved throughout 2022, rising 0.4 percentage points to 7.1 per cent.

The BMA said the ratio of non-performing loans to total loans fell to 5.1 per cent at the end of the fourth quarter from 5.3 per cent the previous quarter, while the ratio of provisions to non-performing loans remained flat at 26.8 per cent over the same period.

Bermuda’s financial regulator said severe distress experienced by certain banks on both sides of the Atlantic has caused financial turmoil in the banking sector, and heightened liquidity risks.

The BMA said it has implemented an enhanced monitoring programme, and the banking sector continues to accumulate data to assess the impact of these recent events.