Bermuda Commercial Bank (BCB) and Merrill Lynch Asset Management (MLAM) have signed an agreement of principle terms and conditions to establish a local joint venture asset management company aimed at Bermuda's insurers.

The agreement was said to be the first of its kind between a Bermuda bank and a US investment advisor, providing an innovative and unique service. The new firm, BCB Merrill Lynch Asset Management Ltd. (BCB MLAM), will focus on fixed income global asset management services, designed for the Bermuda insurance market.

MLAM is the asset management arm of Merrill Lynch & Co. Inc., one of the world's leading financial management and advisory companies. It has about $170 billion in assets under management and is one of the world's largest investment management companies.

BCB MLAM will allow the bank to significantly enhance its services to meet the asset management needs of the exempted company market, firms that have traditionally looked outside of the Island when engaging global money managers.

Ms Audette Exel, BCB managing director, said,"This is an important step for BCB. Over the past two years, we have worked to provide first class banking services to all of our clients. An integral part of those services have been the formation of strategic alliances to ensure that our clients receive service which is competitive, not just in domestic terms, but internationally.

"We chose Merrill Lynch Asset Management to work with us because of their demonstrated expertise and experience in global fixed income management.'' Mr. Arthur Zeilkel, MLAM president said, "We at MLAM are pleased to form this relationship with a partner whose innovative thinking will lead to substantial added value to the asset management needs of the Bermuda institutional marketplace.

"This is also very consistent with the global expansion of MLAM's investment management and marketing plans, particularly in the institutional arena.'' MLAM vice president and senior portfolio manager at MLAM, Mr. Richard Kilbride, will arrive in Bermuda soon to work with BCB in establishing the company.

Professionals from both firms will staff the new operation.

The bank's chief financial officer, Mr. Tony Nagel, emphasised the need for such services in Bermuda: "Many of our clients and many exempted companies have expressed the strong desire to have their asset management needs serviced by world class managers on the ground in Bermuda, rather than having to look to London or New York.''