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New York firm to buy BCB with aim to grow | The Royal Gazette:Bermuda Bermuda Stock Exchange

Jonathan Kent, Business Editor

Published Feb 6, 2019 at 8:00 am (Updated Feb 6, 2019 at 3:29 pm)

Sale agreed: Somers Ltd is selling its subsidiary, Bermuda Commercial Bank (File photograph)

Sale agreed: Somers Ltd is selling its subsidiary, Bermuda Commercial Bank (File photograph)

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Bermuda Commercial Bank is to be sold to a New York investment firm which has plans to grow the business and expand its services.

Permanent Capital, which describes itself as “a socially oriented investor in financial-services companies”, announced the purchase of BCB from parent company Somers Ltd yesterday.

About 70 employees work at the bank, which is based in offices on Bermudiana Road, Hamilton. Hubert Esperon, chief executive officer of BCB, told The Royal Gazette: “There are no job losses or changes anticipated.”

Mark Pettingill, Permanent’s lead counsel in Bermuda, said: “The intention is to maintain the status quo — Permanent Capital has been very impressed with the management team and the staff. They have every intention of growing the bank.”

Mr Pettingill stressed that there were no plans for BCB to offer services in relation to cryptocurrencies, while services to the gaming industry were “unequivocally not part of the business plan”.

He added: “The bank is open to banking any industry, as long as it meets all Bermuda regulatory requirements.”

The gaming question arose because last month Mr Pettingill applied to incorporate Permanent Capital Holdings Ltd as a local company, along with Kenneth Grant Spurling, John Tartaglia and Michael Moniz, as well as Permanent Capital managing directors Lewis Katz and Logan Sugarman. Mr Tartaglia and Mr Moniz, both Bermudians, were directors of MM&I Holdings, a company that proposed to introduce cashless gaming services in Bermuda.

After the publication of this story, Permanent Capital’s Mr Sugarman stated that neither Mr Tartaglia, nor Mr Moniz would be beneficial owners of the bank.

“It is unfortunate that in using a local law firm and its recommended interim legal structure, Permanent Capital was linked to another local business with which it otherwise has no association,” Mr Sugarman said.

“The sole owners of Permanent Capital Ltd and the sole owners of BCB post-close, are and will be Lewis Katz, Logan Sugarman and Chris Maybury.”

Permanent’s Mr Katz said in a statement that the firm intended to grow BCB into a “full-service commercial bank”.

“Permanent Capital’s acquisition of BCB is not simply an investment in a bank, but rather a commitment to the whole Bermuda community,” Mr Katz said.

“We plan to grow BCB into a full-service commercial bank focused on adding meaningful value to the island’s businesses and local economy — the bank the people of Bermuda deserve.”

Permanent Capital said BCB would provide “market-changing products” like competitive lending rates, bespoke services for key industries like reinsurance, and improved access through better technology including mobile banking.

The deal is subject to approval from Bermuda Monetary Authority, the financial-services regulator, and is expected to close in the first half of this year.

“We greatly value the guidance of the Bermuda Monetary Authority and support shown by the Ministry of Finance throughout this process and share a mutual ambition to grow Bermuda’s financial industry and economy,” Permanent’s Mr Sugarman said.

“Although BCB may currently be a small bank, it is uniquely positioned to change the status quo of Bermuda banking for the better.”

Curtis Dickinson, the Minister of Finance, said: “Permanent Capital’s decision to purchase BCB is a clear endorsement of Bermuda as a jurisdiction of choice to buy and build a business in the financial services industry.

“Their commitment to invest in people, products and services will be welcomed by Bermuda’s consumer, corporate and government sectors.”

Permanent capital stated that while maintaining continuity for both customers and employees, its priority is “to build on the existing core strengths, improving BCB’s product offerings, expanding its services to a wider customer base, and growing jobs on island”.

Mr Esperon, BCB CEO, welcomed news of the deal.

“I look forward to the Permanent Capital team joining our banking family. I am excited about their vision and the opportunities they have planned for BCB, which will transform the island’s financial landscape as we build a better bank for Bermuda.

“BCB is celebrating its 50th anniversary in 2019 and this represents a new chapter in its history, better yet, its future!”

The news came this morning after the Bermuda Stock Exchange had suspended trading in shares of Somers, a financial-services holding company which has owned BCB for more than eight years. After the deal was announced, the suspension was lifted.

Somers stated that it had “entered into an agreement and plan of merger which will result in the sale of the entire issued share capital of Bermuda Commercial Bank Ltd to the investment company, Permanent Capital Holdings Ltd and entities affiliated with it”.

Warren McLeland, Somers’ chairman, said: “BCB has been owned by the group since 2010 and in that period, we have invested significantly in the bank’s infrastructure and staff. BCB, led by its current management team, is now well positioned for the future.

“We will update shareholders once the consideration has been finalised and the sale has completed.”

Alan Gilbertson, chairman of Bermuda Commercial Bank, said: “We are encouraged by Permanent Capital Holdings Ltd’s commitment to Bermuda and look forward to working with them, when the acquisition is complete.

“I would also like to thank Somers Ltd for their commitment and support to BCB over the past eight years.”

• This story has been amended to add a statement from Permanent Capital on the identity of the beneficial owners of Permanent Capital Ltd and BCB, after the closing of the transaction.

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