Management at competitor banks yesterday cited HSBC's takeover of the Bank of Bermuda as a thumbs up for the Island's international stature as a business jurisdiction, while former top officials of the bank called the development "sad".

Bank of Bermuda boss Henry Smith himself cited the proposed sale as having "emotional" elements, with the veteran of the bank saying: "This will be an emotional issue for the bank. I have been here for 19 years and it was not an easy thing to consider," he said, adding that the bank made the decision in order to ensure its continued success.

"We have had 114 years, and this ensures we have another 114 years. This transaction enables us to do that."

Former Bank of Bermuda CEO and president Donald Lines yesterday said he was saddened by the news.

"It is sort of sad, but it is the way it is. The big banks are absorbing the smaller ones. In the banking domain you have the very large and not much in between. But to be absorbed after more than 100 years is sad."

Although the press statement issued yesterday said the Bank of Bermuda would continue to be headquartered in Bermuda and keep most of its senior management and board of directors, Mr. Lines said: "That is largely meaningless. Keeping the same management amounts to local decoration."

However, Mr. Lines said he was not overly surprised at the development and that if it had to happen HSBC was a good choice: "They are highly regarded and first class," he said.

Warren Brown, a long-standing Bank of Bermuda director who stepped down three years ago, said: "It is very sad, we are losing a part of Bermuda's heritage.

"I don't like the trend of seeing Bermuda go abroad. Over time, we are losing our identity and I don't know if that is a good thing."

But looking specifically at the bank's takeover by HSBC, Mr. Brown said: "I can't say if it is good or bad, it may have been a necessity."

However, the news was greeted as a positive indicator of Bermuda's reputation as a business centre by Bank of Butterfield CEO Alan Thompson.

"If you look at this on a macro level, HSBC is clearly a world class bank and you could see this as positive indication as HSBC is showing confidence in the Bermuda marketplace. There is an important message being driven from this, and that is Bermuda's international stature."

Mr. Thompson added that the Bank of Bermuda deal "demonstrates that financial markets today are continually changing and the challenges we face in this constantly changing environment."

As a competitor, Mr. Thompson said: "We have always respected the Bank of Bermuda and we expect that will continue with HSBC. As such, our focus will continue to be a high level of customer service. We don't see ourselves straying from that strategy."

When asked if the Bank of Butterfield would itself consider a takeover bid from a foreign bank, Mr. Thompson did not rule it out but said it would only happen if it was in the best interest of its investors."That is a question we are going to be asked a lot to be very honest. But our board of directors and management have a clear strategy, which is to deliver value to shareholders. Of course, we have to continue to look at options but we have a clearly defined strategy as an independent organisation and that is what we are doing and we believe we are delivering value to shareholders that way," Mr. Thompson said.

He added that the same would apply to any big decisions faced by the Bank of Butterfield including whether or not it would ever undertake a secondary offering on a major stock exchange. "As for an offering, we continue to look at options and if we thought a listing was in shareholders best interest, we would. In today's world of corporate governance, we have to focus on shareholder value - everything is driven by shareholder value."

Capital G Bank CEO Sarah Farrington said: "HSBC is well known to Capital G Bank as one of our correspondent-banking partners. We offer our congratulations to HSBC on the proposed acquisition of the Bank of Bermuda Limited and trust that this development will serve to strengthen our relationship with them."

And echoing Mr. Thompson's sentiment on what this meant for Bermuda, Mrs. Farrington said: "Bermuda is a world-class financial centre with a large and profitable offshore and onshore financial services and insurance industry, and this naturally makes the Island attractive to a global organisation such as HSBC.

"Certainly the proposed acquisition constitutes a ringing endorsement of Bermuda as a jurisdiction and of the strength and integrity of the financial system as well as the opportunities here".