edging up to $19.00.

The value of the bank's stock has been edging up since speculation that the operation could be given an exemption to the strict 60/40 ownership rules.

"I am not surprised that the share price has begun to increase,'' said Calum Johnston, president and chief executive officer of the bank. "Though I believe that it is not yet close to its true value.'' The bank has seen its shares in the last year plummet to $15.00, and languished at about $16 for most of the year. Record-breaking profits of $54 million and a reduction of poor-yield loans have helped pushed up the price.

But the real rise has come since speculation in July that Minister of Finance Eugene Cox would relax the 60/40 rules for all banks.

This has sent Bank of Bermuda shares up from an average of about $28.00 to a new all time high of $40.00. Bank of Bermuda has said that if it gets exemption from the ownership rules, then it plans to list on the Nasdaq.

Both banks feel their shares are undervalued, and would like to be able to tap foreign capital to help expand their operations and make them more liquid. The Bank of Butterfield has not been so vocal about its desires, and has seen a less of a rise than its rival.

But the increase in prices of both banks have sent the Bermuda Stock Exchange Index soaring to just short of 2,000.

Earlier this year it was not uncommon for the index to sit at 1,400, but as both banks are heavily weighted on the exchange the boom has seen the index rise quickly.

Bermuda Commercial Bank, however, has not cashed in on the 60/40 fever, possibly due to a silence from the organisation or lack of strong management at the helm. The bank's stocks have stayed at just above $5.00 to $5.50 since Mr. Cox said not one but all banks would be considered for exemption.

Although Mr. Johnston said he was glad Bank of Butterfield shares had gone up, he added there was still work to be done.

He said: "For the last three years we've focused our efforts on improving our core business and ridding ourselves of under performing assets. We have assembled a first class management team and the results are beginning to show.

We are now in an expansionist mode and there is more to come.'' TAXES TAX