With the sale of the Bank of Bermuda to multinational banking giant HSBC, the question on many lips is whether or not rival Bermuda banks will now be targeted by other global financial institutions.

That prospect has not been ruled out, but neither are those close to the industry saying further takeovers are a sure thing.

Speculation on what could happen follows rumours and then confirmation that the Island?s largest bank was being bought out by HSBC for $1.15 billion out of its pocket and the balance of a $1.3 billion price tag coming from the bank itself. For shareholders, the sale means a pay out of $40 per share from HSBC and a special dividend of $5 from the bank

Ratings analysts told that they would not rule out other Bermuda banks becoming the target of acquisitive foreign banks, but that each of the Island?s financial institutions had different business profiles and would be of interest to potential buyers for different reasons.

Fitch analysts David Spring and Fabrice Toka, both of whom cover Bank of Bermuda, Bank of Butterfield and Bermuda Commercial Bank said as credit analysts, it was difficult to make comments about possible acquisitions but added: ?We understand it could happen?.

Mr. Spring said: ?Looking at the market itself, the (acquiring) banks are interested in lines of business where Bermuda banks are active, and most have exemption from 60/40 rules. This would allow them to be acquired, with the approval of the Minister of Finance.?

Mr. Toka added: ?It is difficult to say who is going to be next, so to speak. But certainly there could be interest in the two other players. But it is up to them (the acquirers) to make that determination.?

When asked if the HSBC acquisition might turn the attention of other banks in Bermuda?s direction, Mr. Spring said: ?Banks tend to follow each other in herds, so it is possible. But in general they are looking at specific lines of business, and not the retail market.

?The attributes of Bermuda banks has not changed, and it is up to them to decide if they are interested in those lines of business. It really depends on the specifics of each business entity,? he said.

Questions put to Bank of Butterfield CEO Alan Thompson the day the Bank of Bermuda announced its proposed sale, were responded to by saying the bank he oversees, the Island?s oldest, would make all decisions in the best interests of its shareholders.

The Bank of Butterfield is listed on the Bermuda Stock Exchange, and would therefore be largely owned by local investors, while the Bank of Bermuda was listed on both the BSX and giant US stock exchange Nasdaq.

Mr. Thompson did not rule out Butterfield being bought up in the future, but said it would only happen if it was in the best interest of its investors.?That is a question we are going to be asked a lot to be very honest. But our board of directors and management have a clear strategy, which is to deliver value to shareholders. Of course, we have to continue to look at options but we have a clearly defined strategy as an independent organisation and that is what we are doing and we believe we are delivering value to shareholders that way.?

He added that the same would apply to any big decisions faced by the Bank of Butterfield including whether or not it would ever undertake a secondary offering on a major stock exchange. ?As for an offering, we continue to look at options and if we thought a listing was in shareholders best interest, we would. In today?s world of corporate governance, we have to focus on shareholder value ? everything is driven by shareholder value.?

Another person closely involved with the financial services industry, but who asked not to be named, said he saw the Bank of Butterfield being in a different position than the Bank of Bermuda: ?The issue for the Bank of Bermuda was that it was competing in global markets where economies of scale and size made it difficult for them. They were up against the big boys.?

Although the Bank of Butterfield also has a network of international offices, he said Butterfield ?has a good momentum in the business they are in. They have no real need to become part of another bank.?

As for Capital G Bank ? which is privately held in contrast to the Island?s other banks ? the source close to the industry said it, compared to the Bank of Bermuda and Butterfield, was in a different league again as its focus was entirely on local business. And he predicted that Capital G Bank could opt to remain private for some time.

?This could be quite good (for Capital G). They are the only purely Bermuda bank, that is their business. Both of the others have had major business outside of Bermuda, that is where their revenues really come from.?