Bank of Bermuda Announces Plans for its NY Office to Concentrate on Trust, Custody and Administratio

Hamilton, BERMUDA (January 16, 1998) -- The Bank of Bermuda announced today that its New York subsidiary plans to withdraw from the deposit taking and lending business and will concentrate fully on its trust, custody and other non-banking, administrative services.

President and CEO of the Bank, Henry B. Smith, stated that "Banking competition is fierce in the U.S. market. While we have had some success in New York in the past, the profits have not been sufficient to justify the very significant capital investment we would need to make in the future to remain competitive. Instead, we have decided to concentrate on our core international businesses of trust, custody and related administration."

The New York office of the Bank was opened in 1984 as an "Edge Act" Bank. It took on its present form as a New York State chartered bank with full trust powers in July, 1989.

The Bank has 23 employees in its NY office. Mr. Smith stated that this figure is not likely to be reduced as a result of these changes. "Some positions will be made redundant but it is expected that they will be off-set by growth in the other business areas," he said.

For further information please contact:

Edgar Felton, Chairman & President

Bank of Bermuda (New York) Limited

Telephone: (212) 715-6300