The Bank of Butterfield yesterday welcomed positive ratings of the Bermuda banking environment, as issued by Moody's Investors Services.

Moody's said that Bermuda's three banks benefit from the sound banking environment in Bermuda, which carries Aa1 and Prime--1 sovereign ceilings for long and short term foreign currency ratings.

Moody's rated Bank of Butterfield, with assets of $4.4 billion at June 30, A3 and Prime--2 for long and short term deposits, respectively; A3 for counterparty; and, a D for financial strength.

Moodys commented: "Butterfield has a liquid balance sheet profile, with modestly sized individual credit exposures. Butterfield has recently taken steps to restructure its organisation -- exiting from certain markets and focusing on core businesses.

"However, Moody's expects that continuing management changes could result in additional strategic moves, the impact of which are somewhat uncertain. On the other hand, given its low risk nature, the bank remains amply capitalised.'' Butterfield's senior vice president and head of financial risk management, Richard Ferrett said yesterday, "We're very pleased that Moodys' commented very favourably on our fundamental balance sheet strength.

"I think it is a very good start for us in our ratings tracking from Moodys.

And our first quarter figures are showing an excellent start to the year, from which we will be building. With continual progress there, we will be even better placed to achieve stronger ratings from Moodys going forward in the future. We already have good ratings from IBCA (International Bank Credit Agency), the bank rating agency that rates us A long term and A1 short term, and also from the US bank rating agency Thomson BankWatch, which rates us AA-long term and TBW1 short term.

"So the executive management team is very pleased with the first ratings from Moodys. We are determined to continue with strategies we have embarked on in recent months, particularly developing the bank's core businesses and hitting those financial goals we have set ourselves.

"It is also pleasing for Bermuda that Moodys recognised the sound banking environment in which we are privileged to operate in here. That is very favourable to all of the banking institutions.'' Bermuda Commercial Bank Ltd. (BCB), with assets of $405 million at September 30, 1996, was rated Baa2 and Prime--2 for long and short term deposits, respectively; Baa2 for counterparty; and, a D for financial strength. BCB executives declined comment on the ratings.

Bank of Bermuda (BOB), with assets at June 30 of $10 billion, was rated A2 and Prime--1 for long and short term deposits, respectively; A2 for counterparty; and a C for financial strength.

Moodys said BOB's ratings reflected the bank's highly liquid and, therefore, conservative balance sheet, its relatively strong capital position, and its improving, though modest, profit ratios.

Moodys added: "Moreover, the bank has a consistent record of steadily increasing profits. Through its international network BOB provides offshore financial services and appears to be well positioned to benefit from worldwide trends. The bank also has a commanding share of the commercial banking market in Bermuda.'' On Monday, BOB president and CEO Henry B. Smith said, "We take pride in our new ratings from Moody's which were the highest received by a Bermuda bank.

These ratings place us in excellent company internationally and underscore the bank's fundamental strength.''