its corporate clients may have moved too far too fast, bank officials have conceded. David Fox reports that the bank now hopes to have automated on-line services in place by the end of the summer which will meet both the clients' and the bank's needs.

The Bank of Bermuda has been forced to sideline a new policy that was part of an effort to further develop its corporate cash management and investment services.

Weeks into the changes, corporate clients, including some insurers, complained that they wished to return to the old system in which the bank provided dedicated account representatives.

Corporate clients prefer dealing with a specific person at the bank who knows their particular account.

But Michael W. Collins, Bank of Bermuda vice president and general manager of corporate banking, assured that the bank is not only committed to providing top service to international business, but is about to unveil new programmes and new services that will benefit those corporate clients.

Director of corporate relationships in corporate banking, vice president Clement E.F. Talbot pointed out: "We are the first Bermuda bank, or maybe the only bank that has focused our energies on servicing the growing insurance industry. We are also probably the only one that has provided equity participation in the industry. We have invested our own capital in some of these enterprises.'' During the early 1990s, when nearly $5 billion in capital was moved here to establish eight property catastrophe reinsurers, the Bank of Bermuda was busy developing relationships through financial exposure.

Over the past four years, the financial institution created an insurance equity portfolio of $35 million, including private equity investments in Tempest Re, LaSalle Re, GCR Holdings, Ram Re, Insurance Partners, Trident Partnership, Conning Insurance Capital and Century Capital Partners.

In addition, the corporate banking department has extended committed credit facilities of about $400 million to Bermuda-based insurance companies.

The bank said the provision of capital in the form of equity and debt has allowed the institution to benefit from its unique position within the global insurance industry.

Officials said that with an operating presence in every major offshore insurance domicile, the bank's goal is to become the corporate bank for the offshore insurance industry.

Mr. Collins said: "Through the vertical integration of financial and administrative services within this one industry, the bank is able to provide everything from seed capital for start-up insurance companies to corporate credit, foreign exchange, custody, cash management and specialised investment products.'' The bank is also creating a series of investment funds for the offshore insurance industry. In order to complement a substantial insurance deposit base, the bank has launched the Bermuda Institutional Money Fund, which has been rated Aaa by Moody's Investor Services.

The bank's combined net institutional and retail money fund assets are currently in excess of $1.2 billion.

Further, an announcement is expected soon of a strategic alliance between the bank and a top US insurance asset manager, which will provide the bank with assistance in developing and managing specialised investments funds for the offshore insurance industry.

Meanwhile, the bank believes it is addressing the concerns of corporate clients who are resisting their efforts at more efficient electronic on-line corporate banking.

Mr. Talbot said: "We heard the concerns of our clients, and have taken steps to immediately address those concerns.

"We had made the initial changes as we began our move toward enhanced electronic banking services. We may have gotten a little ahead of ourselves, but the corporate customer won't require the in-depth interaction with their account representative once our new services are on-line.

"We are going to fully developed, on-line banking which will provide the clients with electronic access.'' The bank has been simplifying its corporate account structure and will offer additional cash management services.

A new electronic banking service, Bankline II, has been in the pilot stages for weeks and will provide an easy-to-use, PC Windows interface, allowing clients and their administrators the ability to automatically feed instructions to the institution's main banking applications.

Many of the corporate clients have been using the bank's five-year-old Bankline service, but will find substantial improvements and functionality in Bankline II, Mr. Talbot said.

Bankline II is expected to undergo another couple of months of testing, before going on-line later this summer. By enabling clients to automatically feed instructions into the main banking application, a greater level of efficiency will be created.

Bank officials believe there will be less need for dedicated account representatives, but they have resolved to give the clients what they want.

They believe it will take time for each client to become comfortable with the new service.

Said Mr. Collins: "We tried to go to a central transaction processing approach in anticipation of the introduction of Bankline II.

"But through discussions with our clients in recent weeks, it is fair to say that the perception was that the change was premature. Clients really wanted to go back to having a dedicated account representative dealing with their account. And that's what we are going to go back to, going forward.

"It won't be exactly the same, though. We are still moving to simplify our accounts structure.

"Central transaction processing should make it more efficient for the clients and for the bank. We will be offering additional cash management services, far more than before.'' Mr. Collins concedes that the service of dedicated account representatives is expensive for the bank. Few other banks provide such services.

But he said: "We recognise the importance of these corporate clients to the bank, especially those firms in the insurance industry. And we have decided we won't charge people for these account representatives.

"But there are certain optional services that include aspects of the cash management service which are being offered for a fee.'' The bank has spent considerable time and resources developing Bankline II and expect that once unveiled, more corporate clients will see the usefulness of the latest form of electronic banking.

SECOND LOOK -- Clement Talbot Graphic file name: CLEMTAL