The Bank of N.T. Butterfield and Son will have another year of record-breaking earnings, according to Calum Johnston, the chairman and chief executive officer of the bank.

After just two years at the helm, Mr. Johnston has turned the bank around, seen profits soar and morale rise among staff.

Mr. Johnston attributes the success to concentrating on the core business in Bermuda.

He said: "Bermuda is one of the core strengths of the business. To be strong you have to have a strong base. These are the most important people in the business.'' Mr. Johnston was speaking on the eve of a party to be held for the company's 600 staff and their spouses at the Southampton Princess to celebrate the hard work put into making the offices Y2K compliant.

He said: "We have had some rough years at the bank and only now is the reward beginning to show. We had a record year last year and we will have a record year this year.'' Last month the bank announced record half year earnings of $19.18 million, up 7.77 percent on the same period last year.

Net income per share for the same six months rose by 11.8 percent or 11 cents to $1.04 cents.

In August last year the bank reported "all-time-high'' earnings of $36.4 million.

Scottish-born Mr. Johnston, said the party for 1,200 people at the Southampton Princess on Friday, was a way of thanking the staff for all their hard work not only for Y2K but in the past two years.

"The idea behind the party was to thank the staff that had worked on the Y2K project. Then we realised that almost everyone was affected. While some worked directly on the project, others worked harder to pick up the slack. Everybody was involved, from bottom to top.

"So we decided to have a grand party. It is time to celebrate anyway in terms of the company. We not only wanted to celebrate the past, but also look forward to the future. We have proved we can produce good results and now it is time to thank the staff. It is a grand celebration of the bank.'' Mr. Johnston also revealed that the company is on the verge of getting a new computer system to propel it into the 21st century.

"We are currently getting ready to implement the system. But you can't simply switch one off and put the other in. But by the end of the year we expect it to enable us to give a much better service.'' The bank has been facing up to the technological advances of the past few years and has been pursuing e-commerce ventures. So far the bank has five e-commerce initiatives, and Mr. Johnston hinted that there could be more in the pipeline.

"Many of them are joint ventures. We are looking to recruit the best partners to use the best brain power and get the best of the breed in all these various areas.'' Mr. Johnston has worked hard at turning the bank around. He took up the post of president and chief executive officer in December 1997 and saw the record profits for the bank last year.

"I think we have put the staff through hard times, but now we can see the results, the bank is doing very well. Everyone has put their shoulder to the wheel.

"There is a way to go yet, but we can now see more clearly where we are going.''