Butterfield Bank made a net loss of $18.6 million in the third quarter as problem loans to hotels ate into earnings.

The bank made provisions of $14.2 million against the loans to hospitality projects in Bermuda and The Bahamas. It also booked a previously announced loss of $7.4 million related to the sale of businesses in Hong Kong and Malta.

Butterfield, which operates in Cayman, Guernsey, the UK, Guernsey, Barbados, Switzerland and The Bahamas as well as Bermuda, also recorded a small increase in loan delinquencies on the Island, for which it made an extra provision of $1.1 million.

The bank's efforts to bounce back to profitability after the huge losses of recent years due to write-downs of investments tied to US mortgages have also been hampered by record low interest rates.

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