relaxation of exchange controls and removal of the interest rate ceiling.

"With the changes, I haven't seen a big impact. (Originally) there were fears that money would go out of Bermuda,'' Bermuda Savings and Loan Ltd.

(BSL) managing director Campbell McBeath said.

But BSL's deposit book has experienced strong growth over the past 18 months, he said.

"We're still attracting deposits. It's not explosive but it's healthy.'' BSL has a deposit base of about $30 million, up from $25 million to $27 million at August 1995.

On the mortgage side, the company's book also continues to grow, he said.

These financial institutions attempt to balance deposits taken in with mortgages loaned out. Shortfalls are covered by bank overdrafts.

Under Bermuda law, 50 percent of deposits have to be invested in mortgages.

Many invest much more than that.

On the interest rate spread, Mr. McBeath said it has held fairly steady. But US interest rates have remained low and stable, he added.

"Circumstances may have been different had US interest rates been ten percent.'' A privately-held company whose majority shareholder is First Bermuda Group, BSL is one of Bermuda's smaller deposit companies. At the other end of the spectrum is Bermuda Home Ltd.

According to recent half year results, Bermuda Home had deposits of $458.6 million at September 30 compared to $428.5 million a year earlier, a seven percent increase.

"We've seen very little impact (on deposits) as a result of relaxation of exchange controls,'' Bermuda Home president and CEO Arthur Haycock said.

Any funds leaving the Island do not "appear to be coming out of our deposit base,'' Mr. Haycock said.

"The impact is being seen in the local stock market.'' All Bermuda's blue chip companies, Argus excepted, are trading below book value while the index is off seven percent since June.

At fiscal year end, Bermuda Home call deposits, part of the $458.6 million, were down slightly at $206.4 million from $207.6 million. But fixed term deposits, also part of total deposits, rose 14 percent to $252.3 million from $221 million.

"More customers are going long, indicating a degree of comfort,'' Mr. Haycock said.

On the mortgage side, he said the latest six month figure was satisfactory.

Mortgage closings for the six months were $28.5 million compared to $36.3 million. But the prior year amount was " a very strong six months,'' he said.

Bermuda Home loans and mortgages at September 30 were $364.2 million compared to $354.7 a year earlier.

James Gibbons, managing director of Gibbons Deposit Company Ltd. also said deposits are on the increase.

"I'm doing better this year than last year but that may be a function of increased advertising,'' he said.

At the end of October Gibbons had $205 million on deposit, up from $184 million at the end of January, an 11 percent increase.

"All that growth came in the last four months.'' On mortgages, he said that: "There is constant demand and the demand is not bad quality.'' Bermuda Monetary Authority general manager Malcolm Williams said that growth in international business is generating wealth for Bermudians and with the relaxation of exchange controls people are more comfortable bringing money into Bermuda.

"Deposit companies have become progressively more competitive,'' he said.

Though BSL, Bermuda Home and Gibbons are enjoying increased deposits, Bermuda Commercial Bank's (BCB) deposit company Somers Mortgage and Finance Ltd.

experienced a marginal decline in deposits.

In its recent annual report, BCB said deposits had grown substantially -- demand, savings and term deposits rose to $371.8 million from $242.1 million, but Somers was not a contributing factor.

"The growth in the deposit book is derived solely from the bank as Somers Mortgage and Finance deposits shrunk marginally during the year,'' BCB said.