more opportunities than problems for financial institutions, according to the Bank of Bermuda.

Hong Kong, in particular, is becoming of greater importance as China opens up gradually to a market economy.

And, in Europe, the confusion over new European Community directives, problems with the Maastricht Treaty and differences in culture have all led to business opportunities.

The greatest potential for the Bank's growth, though, lay in south east Asia, said Mr. Cummings Zuill, the general manager of corporate banking.

The Chinese have opened up the southern part of the country and have created China's first stock markets in Shanghai and Shenzen.

Despite the Tiananmen Square student massacre, Hong Kong businessmen were now optimistic about China, he said.

"The Chinese character for crisis is risk and opportunity,'' he added. Mr.

Martin Lancaster, who is the general manager of the Bank's Hong Kong branch, was in Bermuda this week, with representatives of all seven overseas branches, for the Bank's annual corporate banking get-together.

"The mood in Hong Kong is ebullient,'' he said. "Everyone's very positive and excited and that's mostly to do with the developments in China.'' The formation of two stock markets has led to a rush of interest from Chinese investors.

"The excitement that's causing is unbelievable,'' said Mr. Lancaster. "The demand for shares in China has been incredible, although there is a terrific undersupply.

"There are a great amount of personal savings in China that people didn't do anything with. Now they are being given a chance to invest in stocks.

"The Chinese are inveterate gamblers, so they have plunged right into the stock market.'' The Bank's Hong Kong office, which employs 150 people, was well positioned to take advantage of the situation as investors all around the world turned towards south east Asia, he said.

The fact that well over 100 of Hong Kong's top companies have re-domiciled in Bermuda to secure their assets when the Chinese take control of the British colony in 1997 has helped break down barriers for the Bank of Bermuda.

"It helps open up a lot of doors when you have some of Hong Kong's blue chip companies setting up here. It's a wonderful advertisement for Bermuda,'' said Mr. Lancaster.

He said the Hong Kong branch was increasing its revenues but was cutting back on staff.

"Business is flocking to south east Asia,'' he said. "All corporations are looking to China as a market. China's potential is phenomenal.'' Mr. Zuill added: "While Europe and South America are important to us, the really tremendous potential for the Bank of Bermuda lies in the south east Asia/Pacific Rim area.'' The head of the Bank's European operations, Mr. Barry Shailer, was optimistic about the area's potential for future earnings.

But the Bank showed some caution to Europe recently when it postponed its plans to open up a branch in Dublin's financial centre.

Mr. Shailer said: "The bank has put its plans for Dublin on hold. We took the decision after taking a look at the business potential against the cost of setting up operations to do the business we wanted to do, mainly mutual fund support services.'' But, with offices in Guernsey, the Isle of Man, London and Luxembourg, the Bank was in position to exploit new opportunities within the rapidly changing European Community, he said.

"The diversity of the markets and challenges of different member states makes Europe a particularly interesting challenge to us,'' he said.

"The opportunities are unquestionably there in Europe. It's a large and diverse market. The keys are to be positioned in the right places, control costs and stay focused on what you do best.

"We provide a whole range of management services for collective investment schemes, such as unit trusts and mutual funds. We've a very good reputation in that business.

"The whole concept of doing business, particularly the type of business we're involved in, is becoming more complicated throughout the EC.'' Business in Europe was becoming more complicated with the release of more and more EC directives and the differences in business practices and laws within member countries.

"It's becoming more complicated instead of less complicated which is creating opportunities for businesses like ourselves,'' he said.