HSBC Bank Bermuda Ltd said today its net profit rose to $87 million last year, boosted by sharp falls in loan impairment charges and operating expenses.

The bank, which sold off much of its Cayman operations in 2014 and its private banking unit last year — both bought by Butterfield Bank — said net profit increased by $39 million, or 81 per cent, from 2014.

Loan impairment charges totalled $36 million, down from $64 million in 2014. However, the number showed many borrowers are still struggling to make repayments, as non-performing loans remained at 17 per cent of the bank’s total loan portfolio.

Total loans and advances to customers totalled $2.45 billion, representing a fall of 17 per cent from last year. Acting chief financial officer Phil Alvey explained that the decrease was as a result of repayments made by borrowers outpacing new loans booked over the year.

However, the bank said it saw an increase in demand for mortgages towards the end of the year, while the commercial banking operations “benefited from a more benign credit environment”.

The balance sheet remained strong with total capital adequacy ratio of 22 per cent, comfortably exceeding the regulatory requirements under the new Basel III regulatory regime.

Consolidated operating expenses came down by $18 million, or 9 per cent, to $175 million. The bank said the decrease was driven by the sale of the Cayman operations and added that staffing levels in Bermuda remained stable in 2015.

Net operating income rose by $7 million, or 3 per cent, to $268 million.

Mark Watkinson, the chief executive officer of HSBC Bermuda, said: “Banks continue to operate in a challenging economic environment, both globally and in Bermuda. The overall results were solid against a difficult global background. However, we continue to be a liquid and well-capitalised business, ready to support the Bermuda economy and our customers.”

HSBC Bermuda’s decision to sell its private banking operations, revealed in October last year, was made in order to focus on the customers of the core businesses in Bermuda. These are retail banking wealth management, including HSBC Asset Management and Premier banking, commercial banking and global banking and markets.

The bank said these three businesses represented more than 90 per cent of total revenues and between them generated net profit of $92m for the year, up 33 per cent from last year, with a cost efficiency ratio of 59 per cent.

Mr Watkinson said that last year 147 HSBC staff had contributed 500 volunteer hours in support of educational, environmental and community initiatives. He added that since inception in 2006, HSBC Bermuda’s Staff Volunteer Community Action Day Programme had accumulated a total of 9,000 hours of community service.