Butterfield Bank yesterday announced that it is exploring the possible purchase of Bermuda Commercial Bank ? one day after former chairman John Deuss was granted a $10 million bail agreeing to travel with Police to Holland for questioning about suspected money laundering.

A spokesperson for Butterfield Bank said: ?Butterfield Bank is exploring the possible purchase of Bermuda Commercial Bank. Our discussions are at a preliminary stage and no agreement has been reached.

?There can be no assurance that an agreement ultimately will occur and we do not intend to comment further until our talks have concluded.?

Yesterday morning the trading suspension was lifted on Bermuda Commercial Bank common shares and Bermuda Commercial Bank Warrants after BCB announced that it is currently in discussions with a number of banks who have been identified as potential purchasers. BCB chief operating officer Dominique Smith said prior to current events surrounding Mr. Deuss and First Curacao International Bank NV (FCIB) a strategic decision was made to explore merger and acquisition opportunities on behalf of BCB.

?At that time an external consultant was appointed to assist with finding suitable potential purchasers,? Ms Smith said.

?It was determined by the Board that the introduction of new ownership would benefit both shareholders as well as enhance the future growth and development of the bank.?

Ms Smith said the bank has sought potential purchasers both locally and internationally over the past several months.

?We recognise that banks in Bermuda no longer compete solely within the local jurisdiction. Today all banks must look to the international marketplace. We believe a change in ownership will further assist BCB?s efforts in competing on the global stage.?

BIAS Limited chief executive officer Robert Pires also said he has been in talks with a major overseas bank in a substantial market that has offices throughout the Caribbean interested in buying BCB.

Mr. Pires said Butterfield Bank as a ?well run local institution would be the lead contender to purchase the bank.

?Butterfield Bank buying BCB would remove a major headache for the Government as Butterfield Bank would face no regulatory hoops,? Mr. Pires said.

?The time involved with an outside institution buying the bank would not satisfy the Government and they would be in limbo to regulate them.?

Mr. Pires said Butterfield?s takeover of the BCB would be a ?quick fix? because both are in the same jurisdiction and could easily absorb badly need staff and redundancies would not have to be made. He said he would prefer to see an outside institution purchase BCB as this would enhance competition among banks on the Island but he believes a foreign bank?s ownership of BCB would alarm shareholders.

?We presently have an oligopoly in the local banking industry and we therefore need to have more banks on the Island to increase competition and spread risk around as many players as possible.?

He said Butterfield Bank would see a modest increase in its deposit base if it were to acquire BCB and Butterfield Bank could offer cash to Bermuda Commercial Bank shareholders in exchange for shares in Butterfield Bank.

Ms Smith said until an offer is considered the bank expects a proposal would be made to all shareholders of the bank, including FCIB?s 47 percent stake in BCB. She said the recent press reports surrounding Mr. Deuss and FCIB ?have clearly raised concerns amongst our clients and shareholders, primarily regarding the possible implication and impact on BCB.?

Ms Smith said BCB is unaffected by the investigation of First Curacao International Bank (FCIB) in Curacao.

?Mr. John Deuss? position with respect to the Dutch authorities has no impact on BCB and its ability to provide services. Furthermore, the FCIB clients currently under investigation by the Dutch authorities have no relationship or affiliation with BCB.

?The reality is that public perception is largely created and perpetuated by the information supplied by the media, and public perception is naturally swayed by these reports, particularly when negative or sensational.?

Ms Smith said BCB feels it is more important to focus on the needs of the bank?s clients and shareholders as BCB continues to be a highly liquid, strongly capitalised institution.

?We do not think the allegations have altered the reputation of the bank. However, the nature of the allegations and the climate of uncertainty that has resulted from the investigation into FCIB does represent a business risk for the bank that has to be managed.

?And as a matter of fairness, it is important to remember that allegations remain allegations, until proven otherwise. Reputational risk does not affect the bank?s ability to provide excellent customer service and products to its clients.?

She said BCB was established in Bermuda in 1969, and as with any longstanding business, has in the intervening period encountered a number of changes, at times resulting in both positive and negative press.

?Ultimately the bank has endured these challenges and is currently at the peak of it financial performance.

?With our highly liquid balance sheet, experienced management and staff, the bank remains on course for future development and growth. Our unfaltering dedication to our clients and shareholders remains our priority.

?Our regulator, the Bermuda Monetary Authority, said recently that BCB has not been implicated in any way by the events surrounding FCIB and that BCB has entirely separate lines of business from FCIB.?