The bank earned pre-tax profits of pounds 136.1m for the 12 months to March, compared to pounds 157.7m the previous year. Contributions from Jardine Fleming, its Hong Kong-based joint venture, were just pounds 12m, compared to pounds 38m last year.
John Manser, the chairman, said: "Our profits were affected by the difficult conditions in Asia where all of the markets in which Jardine Fleming operates experienced significant falls in value last year. Outside Asia, revenues reached their highest levels ever, a testimony to the success of our diversification strategy."
In a statement, Flemings said: "The situation in Asia continues to be difficult and its impact on the global economy is uncertain."
Mr Manser stressed that the bank remained committed to Jardine Fleming and would support it with resources where necessary. The bank did not disclose whether it intended to lay off any staff in the troubled Asian region of operations.
Flemings - which is still owned by descendants of Robert Fleming, the bank's founder - made its usual commitment to its independence despite the wave of flotations that has recently swept through the financial sector.
The bank said: "There are advantages to being privately owned and independent. We have no plans to change things for the foreseeable future."
The securities and capital markets division "recorded a creditable overall performance" despite the Asian turmoil, said Flemings. Both corporate finance and banking had a good year, with Flemings' commercial banking division achieving record profits.
In asset management, the bank recorded a 63 per cent increase in European funds under management, which now stand at pounds 5.3bn. Flemings said that Rowe Price-Fleming International (RPFI), its US operation, and Save & Prosper made particularly good contributions to profits.
Despite the fall in profits, 1998 dividends per share were increased by 0.5p to 25.5p.