Metavante Corp. is scheduled to take over the bank's loan, deposit and other major systems by the end of 2003, the bank announced today. Metavante, a Milwaukee company, has more than 5,100 clients including the nation's 20 largest banks.

The move should increase profits for Hawai'i's second-largest bank company, said Michael O'Neill, Bank of Hawaii president, chief executive and chairman.

"Our efficiency is not nearly where I would like it to be, and we're looking for ways to improve," he said in an interview today. "This contract is an example of those ways."

The move will cost the bank $35 million, including $6 million in severance pay to laid-off employees, according to a bank statement. Most of the 250 layoffs will occur in Hawai'i, and will take place over the next year, O'Neill said.

Bank of Hawaii has 3,000 employees.

The Metavante contract is the latest of many cost-cutting moves at Bank of Hawaii since O'Neill, a former Bank of America executive, took over in late 2000. The bank has shed more than $4 billion in assets, more than 1,000 employees, and dozens of branches in an attempt to focus on Hawai'i and improve profits. Once stretching from the western United States to Australia, Thailand and Japan, and with branches and subsidiaries in many Pacific island nations, the bank is now concentrating on Hawai'i and Guam.