The Bank of Bermuda's New York office has completed a deal to subcontract US dollar money transfer and securities clearing activities to Citicorp, one of the largest New York money centre banks -- but at the cost of more than 20 jobs.

Citicorp has already begun running parallel operations prior to assuming total control over the clearing activities.

Bank of Bermuda executive vice president Barry Shailer, said this week, "We started transferring our European settlements on July 29, our Asian settlements at the end of August. And everything from Bermuda will be switched by the end of this month. It's a gradual process.'' Last March the bank said that it could mean the loss of 15 to 20 jobs from the New York branch, once staffed by 44 people.

"Almost every foreign bank has out-sourced activities to larger, higher volume New York banks over the past five to ten years,'' president of the New York office Edgar Felton said at that time.

Mr. Shailer said yesterday: "It's freed up 25 jobs. There was one or two cases were an employee was redeployed to other areas of the group, and one or two also moved to Citicorp with the work. The rest, all non-Bermudians, have left the bank for other jobs.

The move was seen as a way of reducing operating costs and allowing the New York bank to concentrate on marketing banking and trust services to clients.

Marketing staff were also increased, to improve contact with insurance companies and investment management firms.

Mr. Shailer said: "When we set up the operation in New York (in 1989), we wanted to arrange our own clearance of US equities. We wanted to be a member of DTC.

"Over the years, we've received a number of approaches from other banks who have said that they would like to bid for the business. Some time ago, the decision was made that we would put that business out to bid again and see what the economics looked like.

"As a result of that, we are now moving those aspects of the New York operation to Citicorp.'' Mr. Shailer said the move to outsource major responsibilities that involve a fair number of people made economic sense.

He said: "So New York will continue to focus on business development and the representation of the bank in North America.''