Butterfield Bank has announced a $213 million loss for 2009, the departure of its CEO, and a huge external investment of $550 million. No surprise given the hair rising rumours that have been floating around in recent weeks (reflected in the steep BSX share price decline).
The Minister of Finance tries to put a happy face on it:
“Their partnership with Butterfield Bank is a positive development for Bermuda’s financial sector and the equity capital commitment represents a long term vote of confidence in our jurisdiction as an international financial centre.”
While the bailout is happy news for the Bank … it is glum for the Bank’s many local investors who will be heavily diluted if not wiped out. (The $550 million of new equity gives the new overseas investors 82.5% of the Bank’s ownership). This is wretched hard news for the local investors, coming on top of Bermuda’s already sick economy.
This leaves Capital G as Bermuda’s only remaining Bermudian-owned Bank.
(Note that $90 million of Butterfield’s heartaches are caused by non performing loans in the Bermuda hospitality sector. But wait, that can’t be true. Don’t know about the rest of you, but the Doc insists he’s having a Platinum Period!)
Update: from a reader … “the moral of the story is that stakeholders should raise bloody hell when management is not performing. That goes for both banks and governments. Bermudians have been very passive.”
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