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Butterfield Bank Named Island's Leading Local Bank By Moody's Investors Service
Hamilton, Bermuda, March 6, 2007 - After a major review of the world's banks, Moody's Investors Service has upgraded Butterfield Bank's long-term deposit rating by three notches from A3 to Aa3. Short-term deposit ratings were also increased from P2 to P1.
The rankings that firms such as Moody's create are indicators of a financial institution's financial strength and ability to protect depositors' funds.
Moody's - one of the world's most respected and widely utilised rating services - used Joint Default Analysis (JDA) methodology and an updated Bank Financial Strength Rating (BFSR) as part of a recent worldwide review of all banks.
"Upon applying Moody's JDA methodology, the long-term deposit rating is raised three notches to Aa3 from A3," said a Moody's statement released in New York on Friday. "We consider Bermuda to be a medium support, highly dollarized country, and have assumed a support level of 90% in this analysis, based on The Bank of N.T. Butterfield's position as the leading local bank on the island."
The JDA methodology identifies four potential sources of external support for banks: parental support, support from a cooperative or mutualist group, support from a regional or local government and systemic support. BFSRs evaluate the stand-alone financial strength of banks without reference to external support factors.
Alan R. Thompson, Butterfield Bank President & CEO said the ratings increase was tremendous news for Butterfield Bank.
"I am pleased to advise that Moody's has upgraded the ratings that they issue for the bank," Mr. Thompson said. "The bank was upgraded in all nine categories for which it receives a rating. Of particular significance to us is a three-notch increase for the long-term bank deposits - a relatively rare occurrence in the industry. The long-term rating has been increased thanks to increased weight given to the likelihood of Government support in the ratings methodology. Our BFSR remains unchanged which, is reflective of our continuing focus on the effective management of the bank's risks and liquidity."