The Bank of Butterfield yesterday added another piece to its Caribbean expansion plans with the purchase of Mutual Bank of the Caribbean Inc. in Barbados.

The price of the purchase was not disclosed, although the bank said it paid cash for Mutual, which has assets of US$125 million.

The move comes three months after the bank purchased two Bahamian banks. It has had a successful subsidiary in the Cayman Islands since 1967.

"This is a very important transaction for the bank," Bank of Butterfield chief financial officer Richard Ferrett told The Royal Gazette.

"It is part of the bank's strategy, endorsed by the board, for expansion into the Caribbean. We see Barbados as an important jurisdiction for the future expansion of the Bank of Butterfield and the diversification of our earnings streams."

Mutual, which will be renamed Bank of Butterfield (Barbados) Ltd., was bought from majority owner Sagicor Financial Corporation and other minority shareholders. Sagicor's main business is insurance, with operations in Barbados, Jamaica and Trinidad and assets of US$1.4 billion.

Mr. Ferrett said Mutual has about 15,000 customers in Barbados and is a full-service community bank.

It was established in March, 1993 as the first indigenous private sector bank in Barbados. Headquartered in Bridgetown with three additional branches, it has 115 employees. In 1994, it launched the first local credit card in Barbados.

It was not known yesterday if the Bank of Butterfield planned to retain all staff.

Barbados has about six banks and Mutual was one of the few that was still owned wholly by Barbadians. Royal Bank of Canada, Bank of Nova Scotia and First Caribbean, made up of the merged Caribbean branches of Barclays and Canadian International Bank of Commerce (CIBC) all have operations in the country.

"We are very pleased to join the business community in Barbados, a location known for its solid infrastructure and good business environment," said Bank of Butterfield executive vice president Graham Brooks.

Bank of Butterfield chief executive officer Alan Thompson said: "This transaction has accomplished a strategic goal for the bank, allowing for deeper market penetration in the Caribbean region.

"The Mutual Bank is a well run organisation that has built a strong foundation of customer service and community commitment. We look forward to working with our new colleagues and helping them continue to provide quality services to meet customers' financial needs. In time, customers will benefit from a broader range of services, strengthened by new delivery channels."

Mr. Brooks will be chairman of the board. Other directors will include Bank of Butterfield executives Conor O'Dea, managing director, Bank of Butterfield International (Cayman) Ltd. and Lloyd Wiggan, senior vice president, retail banking of the Bank of Butterfield.

The bank's mutual fund subsidiary, Butterfield Asset Management, opened a Barbados representative office in 2001 which is focused on investment solutions for international corporate and private clients.

Mr. Ferrett said the Barbados bank would focus on retail and community banking, but acknowledged that it would move to service Barbados' growing international business sector as well.

Mr. Ferrett would not be drawn on whether the bank was looking at any further purchases in the Caribbean, but did not rule out further purchases if the opportunity arose.

In September, the bank purchased two Bahamian banks: Leopold Joseph (Bahamas) Ltd. and Thorand Bank and Trust Ltd. and is in the process of merging them under the name Bank of Butterfield (Bahamas) Ltd.

The combined Bahamian bank will focus on wealth management, trust services and mutual fund administration.

That deal brought in between $1 billion and $1.5 billion to the bank's assets under management.