The Bank of Butterfield stood to gain 50,000 ($82,000) from the loan David Diggins had arranged for Neway Properties Ltd. of Gibraltar, a Supreme Court jury heard yesterday.

David Alexander Diggins, 49, of Somerset, was employed at the bank as a senior manager responsible for international and foreign loans.

David Haige, the chief executive officer of the Bank of Butterfield who is responsible for the United Kingdom and Asia Pacific operations, signed the loan agreement on behalf of the bank in London.

He said he was familiar with Diggins and was aware that he had built up a seizable international clientele for the Bank of Butterfield during his time as the senior manager.

Mr. Haige said he was aware that the loan -- some 1,875,000 -- was for a property in London called the Moulin complex.

And while he did not authorise the loan, he signed it on behalf of the Bank of Butterfield in London after he had glanced through it and checked to see that the Bermuda branch of the bank had authorised it.

Mr. Haige said that apart from the administration fees associated with the loan, the Bank of Butterfield would have received 25,000 for arranging the financing in the first place.

He estimated that between August 25, 1995 and the repayment date of April 30, 1996 the bank would have earned in the region of 50,000.

Meanwhile, Diggins, whose trial entered its third day yesterday, had initially been charged with stealing $2,812,500 and obtaining the money under false pretences and with intent to defraud, inducing Mary Faries to deliver the money to Neway Property Ltd. without proper authorisation on August 29 last year.

But those charges were dropped on Wednesday morning when Solicitor General Barrie Meade issued a Nolle Prosequi which meant that he was no longer prepared to proceed on either the stealing or the obtaining money by false pretences charges as they first appeared on the indictment.

Diggins now stands accused of fraudulent false accounting. It is alleged that on August 25, 1995 he falsified a report and its supporting documents.

Secondly, it is alleged that he obtained a valuable security by false pretences on August 28 and with intent to defraud caused Mary Faries to send $2,812,500 ( 1,504,991.93) to the National Westminster Bank in London.

Michael Richard Moniz, the former electronic security manager at the Bank of Butterfield, told the jury that he examined a laptop computer that had been seized from Diggins' office.

His examination revealed that Diggins was not using his personal drive to create files, even though it was the bank's policy to use its wide area network because it was more secure.

Mr. Moniz said the bank did not encourage those persons who had permission to use the bank's laptop computer system to save work to the computer's hard drive because it was not secure.

That meant that anyone with a password could get access to the work. Mr. Moniz said that he had great difficulty breaking into the files on the laptop found in Diggins' office.

Mr. Moniz said he had to guess what the passwords may have been and he spent several days and used various instruments to help him achieve that access.

The case continues today before Puisne Judge Richard Ground. Diggins is represented by lawyer Julian Hall. Crown counsel Nita Grewal is assisting Mr.

Meade.