Most borrowers are bearing up well under the economic strain of the Covid-19 pandemic, a survey by Butterfield Bank found.

A six-month period when Butterfield allowed mortgage holders to defer monthly repayments has come to an end.

In a third-quarter earnings conference call with analysts yesterday, Butterfield executives said the bank had called 500 borrowers, representing 20 per cent of its residential mortgage holders in Bermuda.

Of those surveyed, 92 per cent said they planned to resume payments, while 6 per cent said they would need further help, and 2 per cent said they did not anticipate being able to resume payments.

Michael Collins, Butterfield’s chairman and chief executive officer, said: “We view these initial results as a positive indicator that the majority of clients should be in a position to resume payments and meet their obligations.”

He added that the bank was working with customers experiencing difficulty and was continuously monitoring the credit environment.

But the call programme’s early indications were that the bank’s conservative underwriting, payment deferral programme and low loan-to-value profile “should help us to manage through this period of potential credit stress”, Mr Collins added.

Michael Schrum, Butterfield’s chief financial officer, said the borrowers called had been those in the higher loan-to-value bracket, considered higher risk loans by the bank.

Butterfield intends to continue calling borrowers and expects to have more clarity on their situation during the fourth quarter.

During the April-to-June quarter, 75 per cent of Butterfield’s approximately 2,500 residential mortgage holders took advantage of the payment deferral programme. By the conclusion of the programme last month, 34 per cent were opting to defer payments.

Mr Schrum also gave some details on Butterfield having shed about 100 employees, representing 7.4 per cent of the workforce, across the group in order to reduce expenses. He said 49 of these were voluntary separations, mainly early retirements, and the other 51 were redundancies.

Staff exit costs in the third quarter amounted to $6.7 million and the bank expects to save between $7 million and $8 million a year as a result of the workforce reduction, Mr Schrum said.

Butterfield also saw an increase of about $300 million in customer deposit balances, to $11.9 billion by September 30 from $11.6 billion three months earlier.

Mr Collins said this may have been influenced by pension withdrawals being allowed in Bermuda and its other major market, the Cayman Islands, as well as some people saving more because they were not spending money on travelling.

One analyst on the call asked Mr Collins about next week’s US elections and the potential impact on Bermuda, particularly with regard to taxation, if the Democrats were to win control of the government.

Mr Collins said: “I would only say that we have been through these cycles in the past.

“The most sensitive industry is the reinsurance industry and they have gone through some real changes that have reduced the tax advantage of being offshore in Bermuda.

“But most of them did not change their strategies at all: they did not move to the US, they did not move to Dublin, they stayed in Bermuda.

“The tax advantage is important, but here they are close to all the reinsurers, accountants, brokers and bankers who actually understand the industry. So it’s a real market that has legs and it’s not completely driven by tax.”

On Tuesday, Butterfield announced third-quarter earnings of $30.5 million for the third quarter, down nearly $12 million from the corresponding period last year.