The Tribune

By NEIL HARTNELL

Tribune Business Editor

BUTTERFIELD Bank (Bahamas) has "regrouped" with "no plans to exit" this jurisdiction, despite downsizing its balance sheet considerably through the transfer of its mortgage portfolio to its Cayman Islands affiliate.

Speaking to Tribune Business after Butterfield Bank (Bahamas) suffered a $719,000 negative swing into the red during the 2012 first quarter, falling to a $137,000 net loss from a $582,000 profit in the 2011 comparative period, Ian Fair, its deputy chairman, said it exited the Bahamian mortgage market after it was unable to achieve "critical mass".

"We've regrouped, basically," Mr Fair told Tribune Business. "The strength of the operation has always been wealth management. We had a big mortgage business here, but just couldn't get critical mass.

"We can't be all things to all people. What we're good at is the wealth management business, servicing clients, and that's what we'll concentrate on."

As a result of the mortgage book's transfer to the Cayman Islands, Butterfield Bank (Bahamas) saw its total assets at 2011 year-end shrink to $77.565 million compared to $146.069 million at year-end 2010.

"It's a critical mass issue," Mr Fair said of the mortgages. "There's so many other people in that area, commercial banks and others. It's just not a market we could get a strategic advantage in."

The Butterfield Bank (Bahamas) deputy chairman said the bank, as a whole, was positioning itself to grow in the markets where its strengths lay, and in this nation - in common with most other institutions - these were in private banking, trusts and wealth management.

"The reorganisation of the Bahamas seems to be going well and is heading in the right direction," Mr Fair told Tribune Business. "There's no plans to exit. There's a strong belief on the part of the people in Butterfield, and our management people here, that the Bahamas is an important part of the operation."

Year-over-year, Butterfield Bank (Bahamas) saw total revenues fall from $1.752 million in 2011 to $1.329 million in the 2012 first quarter. Total expenses also grew from $1.17 million to $1.466 million.