financial statements for the year to June 30 will prove to be "quite satisfactory'' with significant improvements in the first six months of the calendar year 1995.

Butterfield's president and chief operating officer, Mr. J. Michael Collier, announced the payment of a quarterly dividend of 12.5 cents per share.

Mr. Collier also said that over the last quarter, the bank opened a new branch, Bank of Butterfield International (Cayman) Ltd. at the Compass Centre in a commercial development just outside George Town, Grand Cayman.

The bank also acquired 100 percent of the share capital of Argent Credit Group Plc, a small trade finance business located in Slough in England.

Argent will continue to operate under its own name, providing import trade finance to small UK companies, under the direction of the bank's London branch. Argent is expected to complement the bank's own trade finance department in London, increasing the bank's activities in the growing niche market.

The shareholders' letter reviews in length issues involved in the Independence referendum, urging voters to participate at the polls. It states: "Without full participation, democracy will wither and die.'' Mr. Collier said that the financial results for the bank come after difficult conditions which prevailed in the global bond and equity markets for much of the financial year.

"Continued success in our core offshore businesses, together with careful attention to expenses, has enabled your bank to continue to make very substantial investments in new computer systems, staff training, and additional modern office space, which should enable us to approach the next century with confidence.

"Nonetheless, it should be noted that the months ahead hold a good deal of uncertainty, both in the world financial markets and in Bermuda, with indications of slackening economic recovery in the US, a potentially very serious financial crisis in Japan, and (in Bermuda) political uncertainty in relation to the August 15, 1995 referendum which will determine the fate of Government's controversial independence initiative.

"Our optimism must therefore remain somewhat guarded for the moment, but I believe that, as the result of much hard work by all of our employees worldwide, Bank of Butterfield is now reasonably well positioned to cope with whatever difficulties the months ahead may bring.'' The bank agreed that a referendum should decide the Independence issue, enabling the electorate to express a conclusive opinion on the "much-vexed question''.

Mr. Collier said: "It is regrettable that the issue has proved to be a divisive one, at a time when Bermudians need, more than ever before, to come together to solve common problems.'' He urged all Bermudians to "ignore the irresponsible (and certainly anti-democratic) call for a boycott of the referendum and to exercise the democratic rights to which they are, as Bermudians, entitled''.