Swedish bank Handelsbanken, which has an office in Birmingham, posted a fourth-quarter underlying operating profit of £251 million, down 28 per cent from a year earlier, hit by increased staff and administrative costs, lower revenues, and sharply higher loan losses.
The performance disappointed analysts, who had been forecasting profits around the £281 million level.
Nevertheless, in Birmingham the bank had another record year with profit growth of 28 per cent and net lending up by 44 percent year-on-year.
Branch manager Patrick Hanlon said: "This is a reflection of our complete focus on our customers requirements.
"We have continued to win additional business from existing customers who have experienced our decentralised, highly empowered approach and have again won a good number of new customers who want to return to traditional banking values of service and delivery."
Due to its relationship philosophy, Mr Hanlon said the bank did not have any exposure to the US sub-prime market or any of the instruments causing current market turmoil.
Birmingham remains one of the bank's largest UK branches and it was joined in December with a new branch in Coventry.
Mr Hanlon said this was only the start of a major expansion.
"We have plans for other towns in the West Midlands and anticipate opening at least two more branches during this year," he said.
"What is really interesting is the number of our customers who introduce their friends to us, this is particularly prevalent in our Individual Banking operation but also features strongly in our Corporate and Property activities.
"This is highly rewarding as it speaks much louder than any marketing material can."
The bank has said it expects further significant growth in Birmingham in 2008, evidenced that during the last four months it had completed over £100 million of new lending and continued to have a strong pipeline.
"Businesses are looking harder at their banking relationships during this unprecedented time in the financial markets and we are finding that both borrowers and depositors are looking to spread their risk," said Mr Hanlon.
For the group as a whole, loan losses amounted to £13.4 million compared with positive loan recoveries of £324,000 in the third quarter, and loan losses of £4.45 million a year earlier.
Total revenues on continuing operations fell 11 per cent from a year earlier to £536 million, and were below market expectations of £545 million.