Guernsey Press

Butterfield interested in buying CI arm of UK high street bank

BUTTERFIELD would consider buying the Channel Islands operation of a UK high street bank if one ever went up for sale as it focuses on growth.

Published
Michael Collins of Butterfield Bank. (Picture by Steve Sarre, 23252184)

Outlining a strategy of ‘a third, a third and a third’, Butterfield chief executive officer Michael Collins said the Channel Islands could become a key plank of its business along with Bermuda and Cayman.

Asked if Butterfield would consider buying a UK high street bank’s business in Jersey or Guernsey, he said: ‘Yes. I think we have been public about our interest in increasing the size of our banking presence in both Guernsey and Jersey.

‘Obviously, it’s a bit opportunistic because there are not often many platforms for sale.

‘But when they are, we are always first in line to take a look at it.’

Mr Collins added that Butterfield’s presence in Bermuda and Cayman was very profitable, but that the bank had a ‘lot of concentration in those markets’.

Growing in Jersey and Guernsey could ‘balance out’ the risk profile and balance sheet, with the Channel Islands being a ‘perfect market’ for Butterfield due to its similar client base to Bermuda and Cayman.

‘Maybe the Channel Islands eventually becomes a third of our business and Bermuda is a third and Cayman is a third. It just seems to be a better spread of business and risk. So, we’re definitely interested,’ said Mr Collins.

Buying a high street bank subsidiary would be far larger than previous deals, but Butterfield could access capital to pay for such acquisitions. ‘One of the benefits of being listed on the New York Stock Exchange is that we actually have access to capital now.

‘So, if there’s an opportunity like that and we need to raise capital, we go back to our shareholders and investor base and explain why it makes sense and raise capital, whether it’s common equity or subordinate debt or preferred shares intended to fund it.

‘One of the larger banks would be somewhat transformational and we would get to a third, a third, a third platform much more quickly than if we acquired a number of small banks.

‘But we can get there either way – and that’s really the goal.’

His comments come as a deal to buy Deutsche Bank’s global trust business, including an office in Guernsey, has completed, with integration into Butterfield ‘going well’.

It has also bought Deutsche’s deposit-taking bank in Jersey, with that acquisition closing in the first half of next year.