Bear Stearns has reported its fourth consecutive year of record profits after a surge in equity trading offset a fall in investment banking business, driving net profits for the year up 9% to $1.5bn (€1.3bn).

The US bank also said it has drawn a line under regulatory investigations over allegations of improper mutual fund trading, making an offer to the Securities and Exchange Commission, the US regulator, and the New York Stock Exchange, to pay a $250m settlement. The bank has already set aside legal reserves to cover the settlement.