a part of France's Societe Generale, established its first significant business interest in the Caribbean by buying Coutts Bahamas from National Westminister Bank.

Bahamas was chosen over Bermuda or the Caymans, it is being hinted, because Bahamas, unlike Bermuda, is a sovereign state.

And business interests appear to be tuning-in to the endeavours of major onshore jurisdictions to make offshore less desirable, in order to lure more business back onshore.

In recent months, Bermuda has faced new challenges from both the US and the UK that could pose potential threats to growth of the Island's international business.

But in an agreement at the weekend, estimated to be worth about $100 million, SG appears set to realise its ambition to expand private banking through its new bank subsidiary, Hambros.

SG Private Banking chief Stephane Hild said Bahamas was chosen over Bermuda and the Caymans, the Financial Times (FT) reported, because it was independent and "relatively immune to pressure from other countries.'' SG said Coutts Bahamas would help to serve its existing customers in South America, who are now handled from Zurich. The $3.3 billion in assets it holds for 1,000 clients will raise SG's private banking assets to $30 billion under management, and its base of wealthy customers of 50,000.

The FT reported on Monday that there was also increasing interest in the Caribbean from European clients, who were worried by European Commission proposals for tax harmonisation and the UK's review of the regulatory regime in their offshore territories.

Coutts Bahamas was estimated to have net assets of $15 million. The National Westminister Bank Group operates Coutts & Co. (Bermuda) Ltd. in Hamilton from Crawford House at 23 Church Street.

Coutts is the Nat West Group's global private banking arm with over 40 offices in 16 jurisdictions and who counts the Queen as one of their clients.

Coutts has operated a trust company in Bermuda since 1993, offering a full range of services and focusing on trustee services to high net worth individuals and corporations.