BERMUDA’S oldest bank, Butterfield Bank, which has operations in three Caribbean islands, has reported losses of more than US$200 million for the second year running.

Butterfield said it made a loss of $207.6 million in 2010, due mainly to selling off troubled assets at a loss early in the year.

But after another painful year following 2009’s $213.4 million loss, the bank believes it is in a position to return to profitability.

The bank ended 2010 with 1,519 employees across its operations in seven jurisdictions, 87 fewer than at the end of 2009. It has branches in the Bahamas, Barbados and Cayman Islands.

“We’re happy to put a very difficult year behind us,” Butterfield chief executive officer Brad Kopp told reporters.

“The message we want to get out there is that we’ve cleaned house. It’s been a year of restructuring and cleaning up and now we’re in great shape to earn some money.”

The year was notable for the $550 million ploughed into the bank by a group of mainly overseas investors, including the Carlyle Group and the Canadian Imperial Bank of Commerce, last March.

This gave the bank the means to sell off the remaining asset-backed securities, linked to US mortgages, that drove the bank to huge losses over the past three years.

In the first quarter of 2010, Butterfield recorded losses of $113.8 million on the sale of these assets.

The other notable expense during the year was a restructuring cost of $12.4 million, relating to the bank’s sell-off of its Hong Kong and Malta businesses, part of a broader effort to simplify the business and focus on core banking activities.

Butterfield, founded in 1858, is the island’s second largest behind the HSBC-owned Bank of Bermuda.