Capital G Bank revealed yesterday that it had received $20 million of new capital from its parent company to ensure the bank can withstand further economic turmoil.

The move came after extensive stress testing required by regulator the Bermuda Monetary Authority and the bank said it was now "stronger than ever".

Bank of Bermuda, which is part of the HSBC Group, said it had not required to raise extra money. "Bank of Bermuda does not need to raise capital," a spokesman for the bank said. "Our capital ratios are well in excess of all regulatory requirements."

Capital G Bank president and chief executive officer John Kephart said: "Bermuda, like the rest of the world, is experiencing the effects of the downturn of the global economy. Bermuda residents should remain confident in the financial sector and feel assured that their deposits are safe and secure.

"It's important for us, as a community bank that has been entrusted with the hard-earned savings and investments of our customers that we provide full transparency in order to retain the trust of our valued clients."

In its statement yesterday, the bank said "consistent with the BMA's recently announced directive to all Bermuda banks to establish increased capital buffers, our parent company will add an additional $20 million of Tier 1 capital to our equity base".

The bank added that international standards required a Tier 1 capital ratio of ten percent, while Capital G's ratio was 13.3 percent. The new capital injection added to the bank's balance sheet as of the end of last year would boost the ratio of 17.8 percent. Tier 1 capital is described as high-quality, core capital.

Mr. Kephart said the company operated a conservative investment process and added: "Our team monitors both local and international trends to ensure the overall stability of the bank and the financial success of our clients."

Capital G said it was 100 percent funded with core customer deposits and its own shareholder's equity capital, so has zero reliance on "bought" funds from external or interbank markets.

The bank added that it expected to report another profitable year and will post its financial earnings on its website, (www.capital-g.com) early in the summer.