Butterfield could be looking to expand overseas offices, new president and chief executive officer Calum Johnston suggested yesterday.

When asked where the bank might go now it was back on track to improved earnings, Mr. Johnston said expansion in the Caribbean region might be considered.

"We can replicate a Cayman Islands,'' he said in an interview. The bank's Cayman operation, along with its Guernsey office, are its most productive profit centres overseas.

Mr. Johnston also sees Latin and Central America as possible areas for expansion especially in the area of money management. As the former executive vice president in charge of international banking at Canada's Bank of Nova Scotia Mr. Johnston was involved in the purchase of an equity stake in an El Salvador bank. It's a region which has a fair share of wealth people, he said.

He said that in the competitive world of international banking Butterfield will have to continue to compete on quality and service rather than on size.

"The Bank of Butterfield can't compete on size,'' he said. "We have to become even better at what we do.'' On the local front where the bank has poor profit margins he and the executive team will concentrate on continuing cost-cutting measures and improving efficiency.

He emphasises no reduction of local staff is in the works. Rather, the bank will attempt to encourage more electronic banking though ATM machines, and through more computerisation of operations. Staff which are freed up by such measures will be shifted to improve services. In fact, Mr. Johnston said the bank might have to hire new staff to fill some vacancies.

He also does not see the need at this time to make staff changes to the 12-member executive team put in place by his predecessor John Tugwell, who was only on the job for about six months.

Mr. Johnston has however shifted some responsiblities. He has consolidated all international operations under the supervision of Graham Brooks, the executive vice president in charge of group asset management. Previously some international operations reported to the president and chief executive officer.

"I prefer not to have functional management,'' he said. "I prefer very strong relations but the local man on the spot has to run his business. You can't have six or seven people come in to tell him how to run different parts of the business.'' He has also put Peter Cawdron on special assignment, and turned responsibility for operations over to Wendell Emery, senior vice president in charge of group administration and communications.

Mr. Cawdron was the only outsider hired by Mr. Tugwell when he formed the new management team.

He believes the bank's future growth in profits will be achieved by increasing the volume of business in its existing services. In the domestic retail market he believes the bank is not fully exploiting its assets.

"The service is not good,'' he said. "It will get better, I assure you.'' Mr. Johnston has been hired on a five-year contract.

Photos by David Skinner CALUM JOHNSTON -- The new president and chief executive officer of the Bank of Butterfield believes the bank's future growth in profits will be achieved by increasing the volume of business in its existing services.