Butterfield Bank has a restructuring in the works that could cost dozens of jobs in Bermuda. Headcount reductions come as the island’s oldest bank reports record profits but as financial institutions globally struggle with economic and rate uncertainty. In a statement on Tuesday, Butterfield acknowledged the cutting of positions but did not provide details. It said that some “roles had been impacted” owing to a “restructuring”. An internal memo from the chief executive, Michael Collins, to staff said that 9 per cent of the institution’s worldwide headcount would be cut. Butterfield employs 413 people in Bermuda, 244 in the Cayman Islands and 1,341 globally, according to its 2022 annual report. If the layoff ratio holds throughout the organisation, about 37 jobs will be lost in Bermuda and 22 in the Cayman Islands. “I am writing to share with you our decision to reduce Butterfield’s workforce by 9 per cent in a group-wide restructuring,” Mr Collins said in his message to employees dated September 25. “In the majority of cases, the redundancies are effective immediately.“ He added that in Bermuda a 14-day consultation period was being initiated before the decisions are finalised. “You may be wondering why this is happening when our financial performance has been solid. While we have done a good job at containing costs, we are not immune to the inflationary pressures that all companies are facing today. As a management team, we have thoroughly reviewed our businesses, forecasts and market conditions.” “As with most banks, Butterfield’s earnings have been favourably impacted by rising interest rates, but our current outlook suggests that we are at the top of the US interest-rate cycle. “As interest rates flatten or start to fall, we must reduce expenses to partially offset declining net interest income while maintaining a low-risk balance sheet throughout the rate cycle.” Banks globally have been facing challenges related to the volatile interest-rate environment and other factors, with smaller institutions hit especially hard. The iShares US Regional Banks ETF is down 31 per cent from the beginning of the year. Butterfield is down about 13 per cent year to date. New York Stock Exchange-listed Butterfield has a $1.31 billion market capitalisation and, according to its second quarter 2023 report, had $12.2 billion of deposits and $5 billion of lending. In the first half of the year, it reported net income of $123 million, up from the $93 million in the first half a year earlier, putting it on track to beat 2022 earnings. The bank is already far down from its peak in Bermuda in terms of staffing. In 2009, it employed 761 people on the island. If 37 jobs are lost in this round, headcount could be taken down to 376, about half of what it was in 2009. Butterfield Bank was founded in Bermuda in 1858. It is in the Cayman Islands, Guernsey, Jersey, Singapore, Switzerland, the Bahamas and Britain, with retail banking services available in Bermuda, the Cayman Islands, Jersey and Guernsey. It employs 379 people in the Channel Islands and Britain and 305 outside its main centres of operations.

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