Financial-services holding company Somers Ltd made a profit of $100,000 in the final quarter of 2015, down from $1.2 million in the same period the previous year.

The company was impacted by a 2.5 per cent depreciation of sterling against the US dollar. Some 42 per cent of Somers’s balance sheet is denominated in foreign currencies, primarily sterling.

The company’s board is considering implementing a more active hedging policy to counteract the effect of currency fluctuations.

Somers owns Bermuda Commercial Bank, which achieved a capital ratio of 20.9 per cent during the three months up to December 31. The bank’s revenue for the quarter was $1.3 million higher at $7.4 million, however its investment portfolio made a net loss of $1.3 million.

The bank, which has acquired a 75.5 per cent interest in British-based Private and Commercial Finance Group, saw its core earnings improve with net interest income up by $4 million, year-on-year, to $7.1 million.

“Somers recorded a small profit of $0.1 million for the quarter with results being impacted by sterling’s underperformance against the dollar,” said Warren McLeland, chairman of Somers.

“Dividend income received from the investment portfolio was largely offset by valuation losses. The foreign exchange losses resulted in a 0.9 per cent decline in our NAV to $17.58 from $17.74 at September 30, 2015.”

He added: “A number of Somers’s investments, in particular Waverton, Ascot Lloyd and PCFG, are denominated in sterling and during the quarter sterling declined by 2.5 per cent versus the dollar. Currently the sterling based investments are not hedged but the board is considering a more active hedging policy.

“There was little transactional activity during the December quarter as the company’s capital remains fully invested. We also continue to carry minimal debt on our balance sheet. As capital grows and our profitable investments return cash, we will look to use these funds to diversify our portfolio.”

Waverton Investment Management Ltd represents 24 per cent of Somers’s investment portfolio. Its profit before tax fell to £1.1 million for the quarter, compared with £2.2 million in the same period of 2014.

Somers also has investments in Ascot Lloyd Holdings, an independent financial advisor with offices across Britain. These investments are in the form of loans and convertible loan notes totally £8.4 million, which gives Somers a 44 per cent economic interest in the group.

Somers also has a 22 per cent economic interest in Merrion Capital Holdings, an Irish-based financial services group, and a 99 per cent stake in Stockdale Securities Ltd, a corporate and institutional stockbroking group that was formerly known as Westhouse Securities Ltd. However, Somers’s stake in Stockdale is expected to be diluted in the future due to an employee incentive scheme at the British-based company.

In a statement, Somers said its shareholders’ equity stands at $207 million, down from $209 million at the end of September.