Executive Officer, The Royal Gazette can reveal.

The present head, Calum Johnston, has not handed in his notice at Bermuda's second largest bank, but could leave sooner than expected if a suitable replacement is found before his term is up.

Mr. Johnston took over the helm in December 1997, under a five year contract, but the bank has decided to start looking for a new head two years before its end to ensure a smooth hand-over.

But if the right man or woman for the job is not found, then it is believed Mr. Johnston will stay on beyond the scheduled end of his contract in December, 2002.

The search will take place in Bermuda and overseas and in and out of the bank, with a London-based recruitment agency being called in to help with the job.

If he stays until the end of his contract, Mr. Johnston will be 67, past the normal retirement age of 65. He has stated he will retire once he leaves this post.

Since Mr. Johnston came to the bank, he has turned the company around and profits have soared. Expenses have been checked, unprofitable lines cut back and staff morale boosted.

There have been ten consecutive record quarters under Mr. Johnston, who attributes his success to focusing on the core business in Bermuda and cutting expenses.

He has also steered the company towards getting an exemption from the 60/40 ownership rule which restricts foreign ownership of the bank to 40 percent.

The bank said this will help its shares reach "their true value''.

It is believed the bank will be able to get more capital, and therefore expand and make more money, if it can attract more foreign investment and push the price of shares up.

Before taking over at Bank of Butterfield, Mr. Johnston, a long-standing international banker, was the executive vice-president of international banking with the Bank of Nova Scotia.

Mr. Johnston replaced John Tugwell, who quit the post after less than six months on the job. At the time, Mr. Tugwell stated that he left due to personal reasons.

The bank is believed to be launching the search for Mr. Johnston's replacement early to find a suitable candidate with the right kind of experience and expertise to take the bank forward.

Both internal and external candidates will be considered during the search and the UK executive recruitment firm Whitney TYZack will handle much of the search effort.

In the six month period ended 31 December 2000, the bank's earnings were reported as a record $28.95 million, an increase of 50.9 percent or $9.77 million on the same period in 1999.