$200,000, what it cost them for the "refocussing'' of its London-based activities nine months ago.

The poor operating performance of Butterfield Securities, the London-based investment management and securities broking subsidiary, led to Butterfield transferring the majority of their London-based stockbroking staff to independent firms last December, incurring a charge of $1,140,618 as a direct result.

Earlier this year, in the half year report to shareholders for the period to December 31, the bank pegged the "refocussing costs'' at $932,169.

The changes saw the bank move away from private client stockbroking toward increased institutional business.

The new figure is published in the bank's just released annual report to shareholders.

Even after a troubled first half in which profitability declined by 16.5 percent, the bank made $31.3 million for the year, a 3.9 percent improvement over the previous year.

The balance sheet grew by 11 percent to $4.28 billion. The bank reported that money moved into deposits in the first half of the financial year, encouraged by rising interest rates and uncertainty in some sectors of the mutual fund industry.

The report noted: "While most operations suffered from the difficult investment and securities trading conditions, generally it was a year of continued success and of substantial ongoing investment for the future.'' An analysis of net income from the bank's overseas operations showed a year-over-year decrease of nearly $1.9 million, a 20.5 percent decline.

Bermuda-based earnings from international and domestic business were generally good, with net income rising by 14.5 percent to $24 million. The contribution from the overseas operations declined 7.9 percent to $8.4 million (before the London charge).

Trust operations, the report noted, account for a significant portion of the bank's business. Client assets under administration were estimated at $14.47 billion, an increase of 6.8 percent over the year before.

Bank staff grew by a net figure of 33 to 1,299 people, even after the departure of the 45 people from the London subsidiary. Salaries and staff benefits for the year rose to almost $60 million, amounting to more than 61 percent of total operating expenses.

Total income rose by 13 percent to $92.6 million and expenses rose by 12.5 percent to $68.6 million.

Total assets under investment management increased significantly. There was a 57.4 percent increase to $767 million in assets under management in the bank's stable of Buttress mutual funds.

Butterfield Mortgage & Finance Ltd. recorded earnings of $7.2 million, an increase of 10.9 percent.

Total deposits dropped $11.5 million down to $288.7 million, as depositors favoured shorter term deposit accounts at the bank itself. Demand for domestic credit has been soft, with total lending increasing just two percent.

Overseas, there were some clear winners. The office on Grand Cayman for example, reported record earnings of $8.8 million, up 22.1 percent. Their balance sheet grew by a strong 32.5 percent to $527.4 million, resulting in net interest income increasing 33.5 percent.

A restructuring of product lines had trust fees sharply falling, although total fee income was up six percent. The Cayman office boasts an impressive cost-to-income ratio of more than 50 percent, an indication of superior control over expenditure.

In London, the private client stockbroking operations suffered for much of the 1994 calendar year from difficult securities trading conditions that prevailed throughout the world, and in particular the UK.

The roughly $1.1-million "re-focussing'' expenditure at Butterfield Securities entailed staff redundancies and other costs such as accelerated write-off and loss on disposal of fixed assets.

But even outside of those costs, the bank lost an additional $1.4 million as a result of the unfortunate circumstances, although it later showed some improvement.

Guernsey had another successful year, with net income growing 95 percent to $1.2 million, as total income grew 27.9 percent.

The Hong Kong office had a year of consolidation, recruiting new staff and developing new markets. A loss of $214,000 was recorded.