Butterfield Bank has agreed to buy parts of HSBC’s corporate and retail banking operations in the Cayman Islands.

Butterfield Bank (Cayman) Ltd, a wholly owned subsidiary of The Bank of NT Butterfield & Son Ltd, and HSBC Holdings plc made the announcement today.

Butterfield said the approximate value of assets being transferred from HSBC Bank (Cayman) Ltd is US$800 million. It added the transfer is expected to be completed in the fourth quarter of 2014.

HSBC also released details of the agreement to sell parts of their corporate and retail banking business in the Cayman Islands.

An announcement read: “Following a strategic review, HSBC Bank (Cayman) Limited, an indirect wholly owned subsidiary of HSBC Holdings plc, has entered into an agreement to sell parts of its corporate and retail banking business in the Cayman Islands to Butterfield Bank (Cayman) Limited.”

It stated that the gross assets of the business as at March 31, 2014 were approximately $800 million. Total assets of HSBC Cayman at the same date were approximately $1.4 billion.

As at 31 December 2013, Butterfield had Cayman-domiciled assets totalling more than $2.3 billion and employed 273 people locally. Butterfield was named Cayman’s “Bank of the Year 2013” by The Banker magazine.

Brendan McDonagh, Butterfield’s chairman and chief executive officer, said: “Cayman is an important financial jurisdiction and a key domestic market for Butterfield. Over four decades, Butterfield has invested in the growth and development of the Bank in Cayman, and we are proud of our position as one of the largest community banks.

“We are committed to providing banking innovation and leadership in Cayman, and by welcoming customers of HSBC to the Butterfield family, we are continuing to strengthen our community banking market presence. This transaction strengthens our core business and market position in Cayman and is in keeping with our Group strategy of deploying capital to business development in core markets and businesses in which we have the scale and expertise to drive long-term growth.”

Conor O’Dea, Butterfield senior executive vice president and managing director in Cayman, was also quoted, and he said: “Butterfield is pleased to be in a position to accommodate HSBC’s customers in Cayman, and we welcome them to the Bank. Our team is committed to ensuring that the transfer of business is seamless.”

HSBC confirmed that the transaction is expected to complete in the fourth quarter of 2014, and said it represents further progress in the execution of HSBC Group strategy. Their release stated: “HSBC Cayman will commence wind down preparations, including ceasing to undertake new business with immediate effect, and will look to minimise the impact on the remaining customers during this period.”

HSBC Bank (Bermuda) Ltd CEO Richard Moseley said: “This transaction marks further progress in HSBC Group’s strategy. During this period of transition, the servicing of our clients and the smooth transition of our business to Butterfield Bank (Cayman) Limited together with ensuring the well-being of our Cayman staff are our top priorities.

“From now until the closing of the transaction, the customers will remain customers of HSBC Bank (Cayman) Limited. We will work with Butterfield Bank (Cayman) Limited to provide a smooth and coordinated transition.”

Butterfield said that they first established a presence in the Cayman Islands in 1967 with the opening of a representative office. Over the last 47 years, the Bank has grown to become a leader in Caymanian financial services, offering a complete range of personal and business banking and wealth management services from three Banking Centre locations and its offices at Butterfield Place in George Town.