The Press office at HSBC has said that the head of HSBC's private banking was “misconstrued” when he was quoted in an interview two weeks ago saying that 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, had just been watching the bomb blasts which destroyed the HSBC office in Istanbul and that the issue may have got confused during a hectic day.

“I think the bottom line is that he was misconstrued,” said Richard Beck at the HSBC London Press office, adding that HSBC had long held Bermuda in high regard. “Without a doubt, negotiations did not begin before spring 2002.”

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 he did not elaborate on the subject. The interview, which went out on the Dow Jones Newswire two weeks ago 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 it 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.

HSBC's head of communications Michael Broadbent said on Friday that Mr. Bannister's comments on private banks had been “confused” with the deal.

“It is a simple misunderstanding,” said Mr. Broadbent. “It sometimes happens when two people talk to each other.”

A spokesperson from Bank of Bermuda at the time 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. When asked to comment on the Dow Jones news story, a bank spokesperson said: “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.”