To be attributed to Henry Smith, President and Chief Executive Officer, Bank of Bermuda:
Monday, 24 August, 1998 - Hamilton, Bermuda: "On Friday, 21st August, the Bank of Bermuda's share price fell from $33 to $27.50 before closing at $32.00. I wanted to respond to the queries we have received as a result of this. We know of no change in the Bank's fundamentals that would cause a decline in its share price. Rather, this trade of the Bank's shares, which involved more than 450,000 shares at a price of $27.50, demonstrates what we have been saying for some time now - that the Bank needs access to a larger market that can support its shares at stable prices. It is a simple matter of supply and demand.
"The fact that the share price recovered later in the day does not alter the fact that a major shareholder was forced to accept a steep discount, simply because the market here is not big enough to maintain the price at that volume. This is not the kind of stability that investors, particularly institutional investors, look for. This is why we remain committed to achieving the listing of our shares on a US stock market.
"We are, therefore, proceeding with specific steps to achieve an overseas listing. The preparation of The Securities and Exchange Commission and Nasdaq filings is well underway. We expect this to be completed around the end of the year.
"The firm of Keefe, Bruyette and Woods has been appointed lead manager for the project. KBW is a leading Investment Banking firm that specialises in the provision of services to the banking industry. Their role is to coordinate the marketing, timing and allocation of the initial placement of Bank shares.
"The Bank remains convinced that the best way forward is with a formal exemption from Bermuda's 60/40 ownership laws and we continue to look for ways to achieve that. While we still believe that our Private Members Bill was the best option, we are now considering the Deposit Taking Business Act 1998 which will be debated at the next session of the House and whether it, either independently or in conjunction with some other bill, may provide the Bank with alternate means to achieve a listing. It is our hope that the legislative options may be clarified by this Fall."
Media Contact: Elizabeth Tee
The Bank of Bermuda
Telephone: (441) 299-6157
Facsimile: (441) 299-6559