Bermuda’s re-invented Butterfield Bank lists on NYSE, eyes trusts market

Bermuda-based Butterfield Bank, one of the oldest names in offshore banking circles, has listed its shares on the New York Stock Exchange, as its chief executive spoke of using some of the funds raised in the IPO to acquire trust businesses that would complement its existing offerings in this area.

Butterfield CEO Michael Collins’s comments appeared on the website of the Bermuda newspaper, the Royal Gazette, on Monday.

On its first day of trading on the NYSE, Butterfield saw its shares close at $24.75, 5.3% above the IPO price target of $23.50. They closed yesterday at the same price.

Butterfield’s listing of 10.6 million shares was aimed at raising US$250m, and was said by the company to be aimed at increasing its liquidity as well as to provide its largest investor, the private equity Carlyle group, with the opportunity to exit part of its investment.

Of the total, US$140m was expected to come from the sale of new shares, while an additional US$110m was due to come from existing shareholders partially cashing out. The bank’s shares have been listed on the Bermuda Stock Exchange since 1971.

Focus now ‘on growth’

Collins, who was in New York for the Butterfield IPO (pictured, with the blue tie, centre) along with Bermuda premier Michael Dunkley (to Collins’s left) and Butterfield chairman Barclay Simmons (to Collins’s right, yellow tie), told journalists that after several years of reorganisation aimed at making Butterfield leaner and more efficient, the focus at the bank now was on growth.

Butterfield appeared to lose its way in 2010, when it posted a US$213m loss in the wake of the global financial crisis, and agreed to allow a number of outside institutions – including the Carlyle Group as well as the Canadian Imperial Bank of Commerce – to acquire a majority stake.

Subsequently it went on to acquire Guernsey-based Legis Group Holdings Ltd in 2014 and, later the same year, parts of the corporate and retail banking business of HSBC’s Cayman Islands business.

In 2015 it acquired Bermuda Trust Company Ltd and HSBC’s private banking, trust and investment business, also in Bermuda, which was reported to have US$24bn in assets under administration and  US$1.5bn in assets under management.

As reported here in February, it also announced a planned winding down of its UK private banking operations, saying at the time that it was looking to focus more on the offshore parts of its business. It said it would, however, maintain a mortgage lending business in the UK, subject to regulatory approval.

‘Real opportunity in trust business’

On Friday, Collins told the Royal Gazette that Butterfield saw “a real opportunity in the trust business”, adding: “Many of the big banks are selling their trust companies, and we think we can grow our scale in this area.

“We want to grow those businesses, because it increases our access to ultra-high-net-worth individuals.”

Oldest bank on NYSE

The Butterfield name is one of the oldest in offshore banking circles. The bank grew out of a Bermuda trading company founded by Nathaniel Butterfield in 1758; Butterfield’s son, Nathaniel T, expanded the business to include financial services.

In 1858 the Bank of NT Butterfield & Son was founded as Bermuda’s first deposit-taking institution; over the next few decades it helped to support the archipelago’s growing tourism industry and infrastructure, then evolved to accommodate the wartime economy of the early 1940s, and a need to look after military personnel stationed nearby.

By 1951 it had become the largest Bermudian-owned and held company in terms of per capita owners.

In the 1960s and over the intervening decades, Buttefield developed its international business, first opening representative offices in London in 1965 and the Cayman Islands in 1967, followed by operations in Guernsey in 1973. In 2004, it acquired a City of London merchant bank, Leopold Joseph.

Its history, in fact, is one of the things about Butterfield that sets it apart on Wall Street, Collins told the Royal Gazette.  It is, he explained, “the oldest bank trading on the New York Stock Exchange”.

The bank’s shares are listed under the ticker symbol “NTB”.

 

ABOUT THE AUTHOR
Helen Burggraf
Helen Burggraf is the editor of International Investment. A US-trained journalist, she has worked in Rome, New York City and London, covering everything from the fashion and retailing industries to the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

Read more from Helen Burggraf

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