Butterfield Bank is in talks with institutional investors to raise a “significant” amount of new capital.

The bank made the announcement this morning, shortly after the Bermuda Stock Exchange suspended trading of its common shares.

“In response to enquiries, The Bank of N.T. Butterfield & Son Limited said today that it is in discussions with prominent institutional investors regarding a significant capital raising transaction that would maintain Butterfield’s capital ratios well in excess of regulatory requirements,” the Bank stated.

Rumours of a takeover have swirled around Butterfield in recent days as its share price fell below $3.

The bank has made writedowns of some $200 million over the past 18 months as the value of investments tied to US mortgages lost value.

The bank’s full-year and fourth-quarter results are due to be published this week.

* Full story in tomorrow's Royal Gazette.