Bank of N.T. Butterfield & Sons Ltd's stock shot up yesterday by nine percent to an all-time record high of $27.25 after it announced the company was to be exempted from strict 60/40 ownership rules.

And prices could go up even further, as the move could make the stock more attractive to investors.

The move was also welcomed by the international business community as good for both the bank and Bermuda.

Bank of Butterfield stock had been languishing at the year low of $15.00, but has been creeping up since speculation that it would get an exemption from the 60/40 rule.

Bank of Bermuda's stock reached the dizzy heights of $51 after the announcement, almost doubling the price of shares over several months from under $28.00.

"This is a very significant move for our shareholders -- as you saw the price of shares went up on the day of the announcement by $2.25,'' said Richard Ferrett, executive vice president and chief financial officer.

And he said the move would make shares more attractive to potential shareholders -- a move which could push the value of the shares up even further.

He added:"Clearly there is an issue about the exemption making the stock more attractive to small investors. We are on a level playing field now with the other markets.'' He said that if you looked at markets of comparable size in say the United States and looked at comparable banks with similar fundamentals, there would be a big difference in the cost of the shares, with Bank of Butterfield shares costing less than US small to mid range banks.

"One of the reasons could be because of the ownership restriction in the past,'' he said.

The bank believes that the company's stock is undervalued on the Bermuda Stock Exchange and has been trying to boost shareholder value.

The number of people now allowed to buy shares has increased and the ability to raise more capital is expected to make the stocks more attractive to investors as the long term prospects for the bank appear to be improved.

The bank said in a statement: "Although the bank is well capitalised and has a strong, highly liquid balance sheet, relief from the requirement of the 60/40 rule will enable the bank to raise additional capital should it be required to facilitate further acquisitions overseas or in Bermuda.'' Bank is riding high Minister of Finance Eugene Cox also recognised the benefits to the bank and Bermuda by granting the licence.

He said: "I am confident that access to international sources of capital that this licence will provide to the bank is warranted and will be beneficial for the bank and, most importantly, Bermuda at large.'' The business community also clubbed together to welcome the news, including rival Bank of Bermuda.

Edward Gomez, chief financial officer of Bank of Bermuda, said: "We congratulate the Minister of Finance on what would appear to be a very sound decision. We are sure he considered the Butterfield application very carefully, as he did ours, and has made his decision in the long-term best interests of Bermuda.'' Diane Gordon, director of the Chamber of Commerce, said: "The Chamber of Commerce is delighted that the Minister of Finance has granted The Bank of N.T. Butterfield and Son Limited exemption from the 60/40 requirements of the Companies Act. Both the Bank of Bermuda and The Bank of N.T. Butterfield & Son now have the opportunity to build upon their successes and compete in the global economy. The Minister of Finance has exercised foresight and this latest exemption further underpins Bermuda's reputation as a premier offshore financial jurisdiction.'' Bermuda International Business Association's Chairman Raymond Medeiros also welcomed the move.

He said: "It is entirely appropriate that Minister Cox has applied the same rationale and due diligence to the Bank of Butterfield as was extended recently to the Bank of Bermuda.

"These institutions have been stalwart supporters of our domestic economy and major contributors in attracting international business. The lifting of the 60/40 restrictions for these banks should assist them in achieving their long-term strategic goals.

"The benefits of an exemption from the 60/40 rule can include: an enhanced ability to seek capital from wider sources outside the Bermuda market as well as an ability to operate in larger, more liquid, financial markets; and the ability to establish strategic partnerships that build expertise and exposure and therefore enhance competitive advantage.'' Roger Ferrett