balance sheet swelled substantially, the financial institution's latest half year figures reveal.

At December 31, 1996, assets were $9.9 billion, up 27 percent from $7.8 billion at December 31, 1995.

For the six months ended December 31, 1996, the bank's profit rose marginally to $19.6 million from $19.5 million with corporate and private trust activity worldwide contributing significantly.

Deposits, reflected on the liability side of the consolidated balance sheet, climbed just over $1 billion in the past year to $8.3 billion. Repurchase agreements, also under liabilities, totalled $1.06 billion.

Repurchase agreements, known as repos, are contracts to sell and subsequently repurchase specified securities at a future date and price. Financial institutions use them to maximise earnings on Treasury securities on a short term basis.

Repurchase agreements enhanced yield on the Bank of Bermuda's holdings of US Treasury obligations, the bank said.

On the asset side of the consolidated balance sheet, cash and deposits were $4.3 billion compared to $3.6 billion earlier. Marketable securities, the bank's investment portfolio, was $4.3 billion compared to $3.1 billion earlier.

On half year profit, reflected in the consolidated statement of income, Bank of Bermuda president and CEO Charles Vaughan-Johnson said: "The bank is satisfied with the financial performance for the period but faces significant challenges in the next six months.'' He also said: "In the year ended June 30, 1996 the bank enjoyed a particularly strong second half year.

"While we believe that markets will remain in equilibrium, the bank will have to work hard to repeat the performance in second half of this financial year.'' Interest earnings were not as strong as the previous period but were offset by improved fee and investment earnings, the bank said.

Half-year interest income was $33.3 million compared to $45.4 million.

Fee and other income rose to $82.7 million from $70.1 million.

It is anticipated that with the bank's recent purchase of Le Masurier, James & Chinn, Jersey's largest and oldest stockbroking and investment management company, that fee income will continue to strengthen.

Effective December 31, 1996, Bank of Bermuda purchased 80 percent of Le Masurier, James & Chinn's shares from Banque Indosuez, one of France's leading international investment banks, and the remaining 20 percent from a minority shareholder.

The bank also said investment income was $9.8 million compared to $5.2 million.

Total revenue was $125.8 million compared to $120.7 million.

Total expenses were $106.2 million compared to $101.2 million earlier.

Salaries, part of total expenses, rose to $63.4 million from $59.1 million while other operating expenses, also part of the total, rose marginally to $42.7 million from $42.2 million.