In the three years since he joined the Bank of Bermuda, Philip Butterfield has seen the organisation adapt to a changed business climate, undergo a public offering on the Nasdaq and last but not least, be sold.

But far from trying to catch his breath, Mr. Butterfield said he is "thrilled" about the bank's proposed takeover by HSBC, which is still subject to shareholder and regulatory approval, and is poised for the challenges of integration with a much larger banking super power.

Mr. Butterfield, a Bermudian, became the bank's chief operating officer in 2001 but joined the bank the year before that as chief administration officer. His posts at the Island's largest bank followed a 28-year career in the US, most recently as chief of staff for Citibank Private Bank.

Although critics of the deal have questioned whether there will be any challenge left for senior management after the bank is bought out ? the dynamics of the bank's business are set to change with its global operations ceasing to be a real part of the bank, but absorbed into HSBC operations ? Mr. Butterfield disagrees.

"To be straightforward, there is so much to be done in terms of the ways that we can better serve the local community," he said, and one real area for growth would be with business from international companies based here."

Looking at the international insurance and reinsurance sector, this is an industry that has well over $100 billion in assets yet less than four percent of those assets are domiciled in Bermuda banks, with us and the other (banks on the Island). The reason that the treasurers and CFOs of those companies choose to have a cap on the extent to which they will use local banks as depositories is because of our capital position. It is a prudent choice."

Mr. Butterfield said HSBC's acquisition of the bank would change its capital profile: "Now being a part of the second largest financial services organisation in the world, that consideration will no longer apply. There is only upside potential. We will be able to offer advice on initial public offerings, offer the more sophisticated capital market products, be able to give them M&A advice. These are all services that the Bank of Bermuda is not today able to do, but as a member of the HSBC family we will be able to."

Relishing the challenge, Mr. Butterfield said of the Tuesday announcement: "On Monday we aspired to be great, on Tuesday the realisation of greatness became totally available to us.

"That is what will be exciting. It is as exciting as O'Hara or Duperreault's jobs in this community," Mr. Butterfield said in comparing the challenges and opportunities facing the bank's senior executives to those of the heads of ACE and XL.

"On the retail consumer side, Bermuda has an average per capita income of $72,000 yet there is a large percentage of Bermudians who have investments outside, investment opportunities outside of this country. With HSBC we can get a much larger share of their wallet on an individual basis, and bigger market share among the Bermuda population," he said, adding: "I have absolutely no plans to go anywhere. I am happy, this is the most exciting time since I joined the bank, for the opportunity to see this happen, make it work and see the results."

Mr. Butterfield added that the HSBC sale also meant great opportunities for Bermudians working in the banking sector and ultimately for the 'Bermudianisation' of the bank.

"I had a discussion just this morning with a very talented young Bermudian working for the bank. He came to see me because he wanted to understand what this meant for him. And he had in hand a job offer from one of the reinsurers on Island. But I was able to persuade him to set that opportunity aside.

"One of the things I impressed on him was to understand who we will become once this (transaction) is consummated. We will have a capacity to serve local Bermudian consumers in ways that we have been unable to do previously. And we will be able to deliver more product and more efficiently and productively than we ever have before.

"Secondly, as a Bermudian interested in a career in the financial services industry, there is now the opportunity to go to work in many other jurisdictions. Here is a company that has 9,500 offices, we have 17."

Mr. Butterfield added that the bank only had 14 Bermudians who work for the bank but outside of Bermuda. With HSBC he said that could change: "We hope to take advantage, very early in this relationship, of opportunities to place talented young Bermudians in secondment within the HSBC family. Particularly those persons who would benefit from improving their knowledge and skills and those people who we have an interest in moving up the managerial ladder.

"This, in my view, is the first concrete way in which a business enterprise in Bermuda can achieve true Bermudianisation. Bermudianisation in my view does not happen when you hire a Bermudian right out of college and put them in some role of responsibility. They have to be able to contribute and have sufficient experience and knowledge."

Mr. Butterfield said although it was 28 years before he returned to the Island to work, he told the young Bank of Bermuda worker that he was talking with that he should consider "where he could be in three to five years time over taking a job with a local reinsurer that may or may not pay you more money, but not provide you with the professional development that you can achieve with HSBC."

He added: "I have gone through one of these transactions in my professional life and the people that do well are the ones who look to the future not the ones who stand around the water cooler and say woe is me. Employees, to benefit, should engage and think about what can I do my own professional well-being and that of the business."

So, Mr. Butterfield has no regrets with where he is at the moment, nor does he intend to move. But is he happy, personally, with what is being paid to shareholders (including himself) in the sale: "Absolutely yes, I think it was a fair price having been a part of the team that achieved that result. I am able to sleep at night and shave in the morning, comfortable looking in the mirror at Phil. I take this very seriously because I know that our colleagues expect that of (CEO) Henry (Smith) and I.

"But I recognise that beauty is in the eye of the beholder so to the extent that people continue to be uncomfortable, we will have more conversation and be in a position to answer questions and concerns."

Speaking as an investor, Mr. Butterfield said he also thought HSBC would be a good place for people to invest the money they got from their bank shares.

"I've only ever worked in the financial services sector and that is what I know best. I would be quite comfortable with a continued investment in HSBC. It is a diversified holding with an attractive dividend (higher dividend pay out ratio than the Bank of Bermuda has had). It is a well-run and well-regarded company," he said.

The bank said on Tuesday, at its announcement of the sale, that Bank of Bermuda shareholders could convert their holdings into HSBC stock without paying any of the usual trading fees.

The deal, subject to approval, is set to be completed in the first quarter of 2004.