Butterfield Bank will be “intensely focused” on reducing expenses in the higher-cost jurisdictions where it has operations, during the next six months.

Automation, and moving aspects of its business to Canada and Mauritius, are among cost-reduction moves mentioned.

Butterfield Group has a presence in Bermuda, Cayman Islands, the Channel Islands, The Bahamas, Switzerland, Singapore, Mauritius, Canada, and the UK.

On Tuesday, Butterfield announced full-year net income of $195.2 million, up from $153.3 million in 2017.

Butterfield bolsters its revenue operations with “cost-effective support centres” in Canada and Mauritius.

Michael Collins, chairman and chief executive officer, said in a conference call with analysts yesterday that the next six months will be a period focused on expenses.

He said there will be “much more of an intense expense focus, and using our Halifax and Mauritius offices to reduce our expenses in the higher-cost jurisdictions”.

When he was asked during yesterday’s conference call about actions that can be taken to make Butterfield more efficient, Mr Collins said the overall focus was on becoming more efficient in operational processing. He added: “Automating everything; and then moving what we can to Halifax and Mauritius and getting costs down that way. That’s one of the ways we can do it.

“There are other programmes we are working on, that we will talk about next quarter on how you reduce expenses in an island population where, when you reduce headcount it has an effect on the community, it has an effect on your clients, and we have a pretty good sense on how you do that without hurting our franchise.”

Butterfield’s loan book was $4 billion at the end of the year, of which 65.3 per cent was residential mortgages. Non-performing loans totalled $48.7 million in the fourth quarter, which was up from $43.9 million year-on-year, and was about $4.5 million higher than in the third quarter.

However, Michael Schrum, chief financial officer, said: “We remain comfortable with the quality and composition of the loan book and are not currently seeing any specific problem areas.”

In the fourth quarter, Butterfield reported $1.2 million in redundancy costs and a $14.6 million increase in salaries and other employee benefits due to new teams to service its expanded trust business. It acquired Deutsche Bank’s Global Trust Solutions business last March, and its integration into the group is going well, according to Dan Frumkin, Butterfield’s chief operating officer.

Mr Frumkin said client response had been positive. He added: “Staff have come on board; we are doing some cultural events in the first quarter to get everybody integrated. We currently have 70 of the 75 staff we are going to have in place. The majority of those staff joined us in January, so there will be some uptick in expenses associated with the higher staffing levels [in the first quarter].

“Cayman has been fully integrated for a quarter, those clients continue to operate well with good transaction levels; and Guernsey and Jersey are making really good progress.”

Shares of Butterfield Bank jumped 12.9 per cent to $39.50 on The Royal Gazette/BSX Index yesterday, while they rose 14.1 per cent to $41.10 on the New York Stock Exchange.

• Disclosure: the author owns shares in Butterfield Bank