launching a rights offering that will double its capital base.

The Bank of Bermuda has been retained as arranger and manager in developing and structuring the rights offering.

The decision was announced at a special general meeting yesterday, with the rights offering scheduled from Monday May 22 to Friday June 6 for shareholders of record May 18.

The announcement comes on the heels of the bank announcing half year profits of $578,000, and two years after a 30 percent stake and effective control of the bank changed hands.

Managing director, Ms Audette Exel said in a letter to shareholders: "The past two years has been a period of significant accomplishment and success for the Bermuda Commercial Bank Group.

"With the new management team firmly in place, and a clearly defined strategy, the bank has achieved consistent, significant increases in profitability due to the expansion of business, while carefully managing costs.

"The rights offering represents an important step forward for the bank since the sale of shares by Barclays Bank Plc to First Curacao International Bank N.V. (FCIB) two years ago and the confidence which the directors and the shareholders have in the continued growth of the bank.'' The bank, she said, intends to be a leading provider of financial services to both Bermuda and the international offshore market.

"We believe future expansion opportunities,'' she said, "appear attractive, given a fundamentally sound outlook for offshore financial services and our established name in the industry.

"However, in order to maximise our growth potential, a significant addition to our capital base is required. Increased capital will lower balance sheet risk, already very low by comparison with the industry, as evidenced by our risk weighted asset ratio of over 16 percent. It will therefore allow us to expand our business while maintaining our low risk stature.

"The injection of capital through the rights offering will also provide the bank with the flexibility to act on existing and future opportunities as and when they arise quickly, effectively and without straining financial resources.'' Shareholders will be offered one right for every share held at May 18. One right entitles the shareholder to acquire one $10-unit, consisting of two shares and a warrant. Each warrant entitles the holder to subscribe for one new share at a fixed price of $7.50 at any time between May 30, 1997 and May 31, 2001.

Pursuant to an underwriting agreement, the wholly-owned subsidiary of the Bank of Bermuda Ltd., Bermuda International Securities Ltd. (BISL), will underwrite 60 percent of the rights offering, subject to certain regulatory approvals.

FCIB will underwrite the remaining 40 percent.

And, subject to regulatory approval, FCIB will undertake to subscribe for any units not taken up in the rights offering, through a sub-underwriting agreement with BISL.

Senior vice president of the Bank of Bermuda, investments, Mr. Peter Mellor said: "We are pleased to have been given the opportunity to assist Bermuda Commercial Bank in its continuing expansion. Bermuda Commercial Bank has been successful in positioning itself as a wholesale bank targeting high net worth individuals and institutions.

"We believe that the evolution of the Bermuda Commercial Bank into a focused, well-capitalised, wholesale bank will have a positive impact on the provision of offshore financial services from Bermuda.'' The Bermuda Commercial Bank has made significant strides in the last two years. Profits were up 66 percent in the first year under FCIB management, up 104 percent in the second year and is forecasting a 65 percent increase by the end of the current financial year at September 30, 1995.

There has been an increase in assets under management, administration and custody of more than $1.5 billion.