Bermuda-based Butterfield Group has confirmed it will close its UK private banking operations, as it shifts its focus to growing the offshore part of its business.
Announcing its decision to the Bermuda Stock Exchange, Butterfield said it had “commenced an orderly wind down of the deposit-taking and investment management businesses” in the UK, that operate under the name Butterfield Private Bank. However, it said it would maintain a mortgage lending business in the UK, subject to regulatory approval.
The bank said it would now focus on markets where it has “a substantial presence and can achieve economies of scale”, such as Guernsey, the Cayman Islands and Bermuda, which it referred to as “high quality offshore jurisdictions”.
Regarding its reasons for closing the London private bank, Butterfield simply said UK market conditions were “not consistent with Butterfield Group’s growth strategy”.
Butterfield said private clients would be contacted individually, adding: “Butterfield Private Bank is fully funded to return all investments and cash balances to clients and has worked with its regulators to formulate a plan for doing so in an efficient and orderly way.”
Along with its Bermuda and UK operations, Butterfield has a presence in the Cayman Islands, Switzerland, the Bahamas and Guernsey.
In 2014, Butterfield acquired Guernsey-based Legis Group Holdings Limited and, later the same year, parts of the corporate and retail banking business of HSBC’s Cayman Islands business. In October 2015 it acquired Bermuda Trust Company Ltd and the private banking investment management operations of HSBC Bank Bermuda Limited.
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 Butterfield developed its international business, opening an office in Barbados in 2001, and in 2004, acquired a City of London merchant bank, Leopold Joseph.
Today, the Butterfield Group is a publicly-traded corporation, with shares listed on the Bermuda stock exchange.