Mystery surrounds what exactly the boss of HSBC's private banking meant when he claimed in an interview last week that the London-based bank had been in negotiations to buy Bank of Bermuda for four years.

According to HSBC's Press office, the man who made the statement, Clive Bannister, was out of the country and unreachable last week, but were adamant that negotiations only started with Bank of Bermuda in 2002.

And the spokesperson added that Mr. Bannister might have been doing business in Bermuda for years before the deal was started in 2002.

And the Dow Jones reporter who conducted the interview, Sarah Spikes, confirmed that Mr. Bannister said that the deal had “been four years in the making”, but said no more on the subject.

The spokesperson for HSBC said on Friday that Mr. Bannister would be available for interview this week.

The interview, which went out on the Dow Jones Newswire on Monday has sparked controversy in Bermuda because if true, a four-year-old deal directly contradicts the official line from Bank of Bermuda's management which states that negotiations only started in February this year.

And would also mean that when the bank applied for exemption from the 60/40 ownership rule in 2001, it knew it was being targeted for a buy-out.

Mr. Bannister, chief executive officer of HSBC's private banking, is reported as saying in an interview with the well-respected news agency that the deal took four years to to come together.

“HSBC bought Bank of Bermuda for $1.3 billion in October, but it was a special deal that took more than four years to put together, he (Mr. Bannister) said,” said the news report.

A spokesperson from Bank of Bermuda last week that it was only early in 2002 that HSBC first approached the bank about a possible acquisition, but the deal went nowhere.

In a recent interview with The Royal Gazette, the bank's president and chief executive officer Henry Smith said that negotiations only started in February 2003.

A spokesperson for the bank said when asked to comment on the Dow Jones news story: “The Bank of Bermuda and HSBC have had a business relationship for many years, with HSBC providing the bank with sub-custodian and correspondent banking services as well as foreign exchange, credit and other related products.

“But it was not until early 2002 that HSBC first approached the bank about a possible acquisition.

“No proposal was made at that time and after a brief time the parties terminated these preliminary discussions. In February 2003, the subject was again raised by HSBC, and following preliminary discussions in April, the bank and HSBC entered into negotiations concerning the possible acquisition of the bank.”

Back in April 2002, when asked if there was a possibility of a large bank such as Chase Manhattan coming in and swallowing up the bank one of the fears often expressed when the bank had talked about floating - Mr. Smith said: “We hope not. The Minister of Finance may have something to say about that.”

Mr. Smith added at the time: “We are first and foremost a Bermudian company with a firm commitment to the local community.”

But the bank announced at the end of October that it had approved a take-over bid by the huge multi-national HSBC, the world's second largest bank.

Mr. Smith has said that the propose buy-out, which still has to be approved by shareholders and the Bermuda Monetary Authority, made sense with the Government's plan to open up the financial sector and possibly allow in more banks.

He said it was better to join with a bank like HSBC rather than have to compete with such a huge organisation.