One year after purchasing parts of the corporate and retail banking business of HSBC Bank in the Cayman Islands, Butterfield has reached an agreement to buy the private banking and trust operations of HSBC in Bermuda.
The purchase price was not disclosed but HSBC’s trust operations and banking portfolio have respectively about $1.5 billion and $1.2 billion in assets under management.
Butterfield has also entered into a referral agreement with HSBC Bermuda to take on select private banking clients.
The transfer is subject to regulatory approval and expected to be completed in the first half of 2016.
Michael Collins, Butterfield’s chief executive officer, said the bank’s growth strategy is centered on the development of its core businesses in existing markets.
“The acquisition of these businesses in Bermuda is very much in keeping with that strategy. It allows us to add scale to our franchise and bench strength to our teams of professional wealth managers and fiduciary specialists in a market where we have a significant presence and long history.”
Butterfield said it would assign positions within the bank to a number of HSBC Bermuda’s Trust and Investment Business employees to ensure that former HSBC clients will continue to be served by the same account managers.
“We are well positioned to take on the HSBC business, and we are working closely with HSBC to ensure we do so in a way that is minimally disruptive to clients,” Mr. Collins said.
HSBC said the sale of Bermuda Trust Company and its private banking operations to Butterfield “represents further progress in the execution of HSBC Private Bank’s strategy to focus on a smaller number of future growth markets.”
As part of the strategy the bank has cut the number of operating countries from 150 to 70.
Last year, HSBC sold $12.5 billion of Swiss private banking assets to Liechtenstein’s LGT Group.