The Bank of Butterfield got a boost this week when Fitch Ratings Agency raised its rating for the bank to `B' from B/C.

The increase in the rating came as a result of the bank's restructuring since the late 1990s, when it was hampered by non-performing loans.

"Butterfield's recent performance and asset quality measures have shown a strong turnaround over the late 1990s, reflecting core earnings strength and the successful execution of initiatives begun in 1997-98, which called for exit or divestiture of certain non-strategic activities and other performance improvements," Fitch said. "Earnings have remained solid in recent periods."

Fitch noted that the bank's interest income levels had been constrained by sustained low interest rates in common with other financial institutions.

But this as offset by gains in non-interest income, mostly from the bank's asset management, trust and administration services, Fitch said.

"The bank's credit risk profile is modest as loans, comprised primarily of residential mortgages, account for less than 30 percent of total assets. The bulk of the loan portfolio is originated in Bermuda.

"Asset quality indicators have improved with the complete disposition of loans from discontinued operations and the strengthening of the bank's credit policies."

However, Fitch noted a recent rise in non-performing assets, but this was attributed to the deterioration of three hotel loans.

Vincent Ingham has been elected a director of the bank, replacing the later Dr. Stanley Ratteray, who died last month.

Mr. Ingham is a professional engineer and executive vice president, chief operating officer and a director of Belco Holdings Ltd. He is also a former chairman of the Bermuda Land Development Company.

Bank chairman Dr. James King acknowledged the significant contribution that Dr. Ratteray had made. and expressed the Bank's sadness at the loss of a valued board member and friend.