If an elaborate explanation is required to describe a financial product, then we're not investing in it. That is the message from Butterfield Bank's chief executive officer Bradford Kopp, who wants to lead the bank into the future by returning to its traditionally conservative values.

Those values were compromised in recent years as the bank invested heavily in complex financial products that soured spectacularly, bringing the bank to its knees.

The bank's new management team is keen to avoid any possibility of a repeat and has bolstered its processes and personnel to better vet its investments.

Mr. Kopp made it clear that after the bank is going to take a safety-first approach in investing, something its shareholders have been urging after the shock of the past three years.

So don't expect Butterfield Bank to be in the market for anything financially exotic any time soon.

"Our investors want us to have a risk-averse culture and the message throughout the company is not to take much risk," Mr. Kopp told The Royal Gazette. "We're not going to be betting the bank on anything.

"We have committees that look at investments and we'll be looking for plain vanilla products.

"The company got into trouble, because it bought complicated mortgage-backed securities and we have no interest in doing that again.

"We'll be buying standard products that you can mark to market and that you can easily understand. And when we ask you a question about a product then you have to be able to explain to us what it is."

Butterfield invested close to $1 billion in products including collateralised mortgage obligations (CMOs), collateralised debt obligations (CDOs) and Structured Investment Vehicles (SIVs), all complex financial instruments that unravelled during the US housing slump and the credit crisis.

After a string of painful write-downs, the bank sold off its remaining mortgage-backed securities at a loss in the first quarter. The lesson has been learned. "We have increased governance and we do have more policies and processes," Mr. Kopp said. "We have more than 100 people working in risk management." He added that the bank was hiring four or five extra people to monitor markets risk and investments.

In March, a group of new overseas investors, led by the Carlyle Group and Canadian Imperial Bank of Commerce (CIBC), bought $550 million of new equity in Butterfield. The deal involved Carlyle and CIBC each having two directors on the board.

Mr. Kopp said this had not changed the day-to-day running of the bank.

"We on the senior management team are very pleased with the leadership our new investors have shown through their four directors on the board," Mr. Kopp said. "They are here for the long term, about five years. They like the business model and they're not looking to make major changes. "These four directors are all pretty good bankers and they contribute some good ideas, but they are not trying to micromanage things. The senior management team is running the show. We have a very good relationship and we're all looking for ways to make the bank more profitable."

Mr. Kopp also has considerable 'skin in the game'. According to the second-quarter financial report, the CEO bought $1.5 million of shares at $1.21 apiece in connection with the injection of new capital on March 2.

Mr. Kopp, an experienced banker who was previously CEO of ABN Amro North America, was brought in as chief financial officer last November. He succeeded Alan Thompson as CEO in March this year. The Harvard Business School graduate is spearheading the bank's effort to return to profitability along with Michael Collins, senior executive vice-president, Bermuda, who was also recruited last year.