retail, hotel and construction industries, bank chief Mr. J. Michael Collier said in his quarterly letter to shareholders this month.

The Bank of Butterfield president also raised concerns about crime, the "most disturbing development of the year'' and particularly "deplorable'' when visitors were the victims.

And he lamented the fact a large number of young Bermudians seemed to lack literacy.

Mr. Collier noted that while the local economy had shown a healthy increase, local retailers had seen "only anaemic growth''.

Furthermore, "The hospitality sector -- even in its current down-sized condition -- is still not firing on all cylinders,'' he said.

"And the construction industry has had another difficult year, though better things are expected in 1995.'' International business on the other hand had made "impressive strides'', spurred by a strengthening international insurance sector, he said.

Clearly Bermuda's economy is undergoing a challenging period of restructuring,'' he said.

It needed to work on offering good value for money to Bermudians, visitors and its "international business clients'', he said.

"Labour needs to become more flexible and productive and management needs to become smarter and more effective,'' he advised.

Mr. Collier, straying from the period's economic growth, said youngsters could "not hope to succeed in a world of sophisticated service industries'' if they lacked the ability to communicate clearly and interact in a civil manner.

"Computer literacy is increasingly important as well we all know, but old-fashioned literacy remains the building block of all education, and that is something which many of young people seem to lack,'' he said.

He said he hoped a combination of "more vigorous policing and welcome reforms to the criminal justice and penal systems'' would curtail criminal behaviour.

"At the end of the day, however, parenting is more important than policing,'' he said.

Bermuda must "reassert the traditional families values'' which built it in order to "turn back the rising tide of lawlessness and disrespect''.

Mr. Collier disclosed that although financial statements for second half of 1994 were still being prepared, "It is clear that our published results will be down when compared to those reported one year previously.'' The bank had been hurt by "difficult trading conditions'' in the United Kingdom and had to absorb operating losses by its stockbroking operations there.

The bank would still post a "considerable profit'' though, with its core businesses here and elsewhere remaining sound, he said.

The profit warning was the second consecutive half year warning for the bank, which also saw earnings plunge in the January 1 to June 30, 1994 period.