and Son Ltd. forward, president and chief executive officer John Tugwell has fired three top executives.

Mr. Tugwell said yesterday that Stephen Kempe, Colin Furr, and Malcolm Brown are no longer on his 12 member executive team. He also announced a restructuring of the bank's operation in London with some jobs to be eliminated. Last week Mr. Tugwell, who is two months into his job, announced the closure of the bank's 23-person Singapore office and the elimination of those jobs.

The changes will result in "materially decreased profits'' in the short term, he stated in a press release.

"All of these actions in Singapore, the UK, and Bermuda will result in net savings for the bank,'' he stated. "In the short-term, however, there will be associated costs which will result in materially decreased profits for the year just ended. These results will be announced in early August, after the late July board (of directors) meeting.'' Mr. Kempe was in charge of Butterfield's business development division. Mr.

Furr headed the banking division. Mr. Brown headed treasury and capital markets. Mr. Kempe had been with the bank for 35 years, Mr. Furr for 25 years, and Mr. Brown for 16 years. Mr. Tugwell did not reveal replacements, if any, for their positions.

"With efficiency paramount in a changing business environment, the organisational structure is to be flattened,'' Mr. Tugwell stated. "This has resulted in the elimination of three senior positions within the bank.'' In London, where Butterfield has about 100 staff, the bank will withdraw from its lending and deposit service for high-net worth individuals by the end of the year. The bank will maintain its corporate finance and institutional stockbroking service. Mr. Tugwell did not state how many jobs would be cut from the London operation.

"These decisions were predicated on the need to stem losses, which management believe were due largely to insufficient knowledge of, and presence in, the marketplace,'' he said.

The bank's full service London office opened in 1991 to complement its already existing stockbroking subsidiary there, now called Butterfield Securities.

"The steps we are taking are part of a plan to put the bank back on a solid course to improve earnings and enhance shareholder value via a route of increased productivity and efficiency, focused cost management and direct concentration on the core businesses that are at the heart of our historical success and reputation,'' he stated.

Mr. Tugwell also announced the formation of a strategic management unit in the bank but gave no further details. He stated that the bank has increased its loan loss provision as the management team has "determined the need to provide for certain non-performing assets.'' Mr. Tugwell is away from the Island and could not be contacted for further details. Earlier in the week he told The Royal Gazette that there would be no "redundancy programme'' in Bermuda although he would be changing the management team. The bank has 800 employees in Bermuda, and another 300 at its offices in London, Hong Kong, the Cayman Islands, and Guernsey.

He said in the interview the bank would concentrate on its core businesses of trust administration, fund administration, investment management, corporate services and high-net worth private banking.

The Bank of Butterfield had net income of $29 million for the year ended June 30, 1996, a 7.2 percent decrease from the 1995 results. The bank's shares fell 3 to $11 5 yesterday.

Mr. Tugwell began working for the bank in May, replacing Michael Collier who had resigned in December due to ill health.