Butterfield Bank has obtained $550 million in new capital from several institutional investors and has replaced chief executive officer Alan Thompson.

As it announced a $213 million loss for 2009, the bank said it would also offer its existing shareholders the chance to buy $130 million of new equity.

Chief financial officer Bradford Kopp will replace Mr. Thompson, who is retiring from the bank.

Butterfield said its Bermuda segment alone posted a net loss of $208.4 million.

The bank said funds affiliated with The Carlyle Group, Canadian Imperial Bank of Commerce(CIBC) and other institutional investors have invested $550 million in new Butterfield equity. Other investors include the Wellcome Trust, The Bermuda Government Pension Funds, Julian Robertson, and Goshen Investments, LLC.

Butterfield also announced it had suspended dividend payments on common shares until the bank returns to a position of sustainable profitability.

In a statement this afternoon, Finance Minister Paula said: "The Ministry of Finance has noted the 2009 financial results announced by the Bank of NT Butterfield & Son Ltd. The Ministry was aware that the Bank was in discussion with potential new partners who were prepared to inject new capital into the Bank.

"The Ministry is pleased that the commercial resolution was concluded in a manner that considerably strengthens the Bank's capital base. The $550 million injection of new capital enables the Bank to de-risk its balance sheet and positions it for a reasonably quick return to profitability.

"The Carlyle Group and the Canadian Imperial Bank of Commerce (CIBC) are brand names in global financial circles. Their partnership with Butterfield Bank is a positive development for Bermuda's financial sector and the equity capital commitment represents a long term vote of confidence in our jurisdiction as an international financial centre."

* Full story in tomorrow’s Royal Gazette