The stabilisation of Butterfield Bank has been well received by HSBC Bermuda's CEO Philip Butterfield, with the alternative of what could have happened being unbearable for all parties concerned to even consider.

Mr. Butterfield was talking yesterday primarily about HSBC Bermuda's financial results, which were released earlier this month, with the bank recording a $221 million profit before tax during 2009, despite the impact of the economic downturn and continued low interest rates squeezing margins.

He said that as a result of recent developments at Butterfield Bank, which saw a $550 million capital injection from mainly foreign investors, including private-equity giant Carlyle Group and the Canadian Imperial Bank of Commerce, at the start of this month, Bermuda's banking sector as a whole would become more competitive, but he would continue to focus on his own business.

"As a bank we focus our attention on our capabilities," he said. "As a citizen of the community, I am appreciative of the stabilisation that has been brought to bear because the alternative was unbearable to all of us.

"But we here at HSBC Bermuda have not changed our mission statement or strategy and we remain confident that the strategy we have is the proper strategy for the business.

"I think over time things are going to become more competitive and that is not a bad thing because it keeps us on our toes.

"And I would hope that all customers are the recipients of a higher level of service from their chosen service providers and we are very confident we can deliver that to them."

HSBC Bermuda's advances to deposits ratio rose six percent to 37 percent at December 31, 2009 compared to the same period in 2008, while Butterfield Bank's deposits dropped by around $1.1 billion over the past year — from $9.8 billion to $8.7 billion.

Total loans and advances to customers increased by $542 million, or 22 percent, compared with the prior year for HSBC Bermuda, as did total customer accounts by $297 million, or four percent, versus the previous year, also accounting for an uptake in new business.

Mr. Butterfield said the bank's results were solid given the context of global challenges that all financial institutions were facing both on the Island and worldwide, reflected in a strong capital base, good liquidity and an increase in market share for all of its client segments.

Michael Schrum, chief financial officer at HSBC Bermuda, said he was pleased to see revenues from all of the parts of the business contributing to the bank's bottom line, which sent out "quite a powerful message" about its performance.

Consolidated total operating income was down nine percent at $633 million for the year ended December 31, 2009 over the previous year, as was consolidated net operating income by 23 percent at $518 million over the same period compared with 2008.

Profit fell 36 percent, which Mr. Schrum attributed to a one-off sale of a Singapore entity by the bank and subsequent gain of $50 million in 2008, and market conditions, including interest rates causing margin compression.

Richard Moseley, deputy CEO of HSBC Bermuda, said that customers' positivity in their feedback about HSBC Bermuda was borne out in the fact that the bank was sending out the message it was here to stay, was consistent in its approach and had the capital strength to back that up, having set out its mission and pushed forward with delivering it.

Mr. Butterfield, who also launched HSBC Bermuda's Business Summary 2009 yesterday, revealed that a recent customer survey had found that the number of respondents who identified HSBC Bermuda as their primary bank had grown from 42 percent to 51 percent during 2009, while it had long been established as the main service provider for international business.