HAMILTON, Bermuda (CMC) – The Bermuda-based Butterfield Bank says it has entered into an agreement to acquire Channel Islands banking business ABN AMRO (Channel Islands) Limited in a £161 million (US$208 million) cash deal.

Yesterday’s announcement came a week after the bank said it had made 11 staff in Bermuda redundant, while 30 others had accepted early-retirement packages.

Butterfield, the oldest of Bermuda’s four banks, made a profit of US$52 million, or 96 cents per share, in the first three months of the year — up from US$44.2 million, or US$0.79 cents per share, for the same period a year ago.

A bank statement said the acquisition is expected to close in the third quarter, with ABN AMRO’s business and staff in the Channel Islands integrating into Butterfield’s Guernsey operations and operating under the Butterfield name.

Butterfield is making the acquisition through its wholly-owned subsidiary, Butterfield Bank (Guernsey) Limited.

“This significant acquisition is a Channel Islands banking business similar to our existing banks in Guernsey, Jersey, Cayman and Bermuda,” said Butterfield’s chairman and chief executive officer, Michael Collins regarding the agreement to acquire the business from ABN AMRO Group, a Dutch bank.

“Acquiring ABN AMRO (Channel Islands) is a unique opportunity for Butterfield to grow accretively and gain market share in the Channel Islands,” he said, adding that the transaction diversifies Butterfield’s balance sheet and risk profile, from a geographic perspective, “in a high-quality market in which we have decades of experience”.

Collins said the deal underscored the bank’s continued commitment to expand its presence in the Channel Islands, an archipelago in the English Channel off the French coast of Normandy that is part of the United Kingdom.

ABN AMRO was established in Guernsey 35 years ago, and provides banking, investment management and custody products to trusts, private clients and funds. At the end of 2018 it had US$2.9 billion in deposits and US$3.5 billion in assets under management and custody.

Speaking about Butterfield’s first quarter performance, Collins described it as “solid” and said it was “underpinned by our capital efficient fee businesses, well-positioned balance sheet and focused cost management”.

He said Butterfield has completed “on boarding” the remaining Deutsche Bank clients in the Channel Islands, following the acquisition of Deutsche Bank Global Trust Solutions last year.

“While deposit balances have fluctuated, we have been pleased to see periods with overall balances in excess of US$1 billion from this transaction.”

Butterfield has subsidiary offices in the Cayman Islands, a sister British Overseas Territory, while in The Bahamas it provides personal trust and company services.