Posted on: Friday, March 7, 2003

Bankoh shifts key investment officials

By John Duchemin
Advertiser Staff Writer

Bank of Hawaii has restructured its asset management division since the division's poor showing in 2002, investment officials say.

The bank has shifted key officers and changed some of its investment policies in an effort to improve the bank's investment performance, said Donna Tanoue, vice chairman in charge of financial services for the bank.

The move comes after Pacific Century Trust, an investment management subsidiary of Bank of Hawaii, was placed on the "watch list" in February for poor 2002 performance by the Employees' Retirement System, the state's pension fund.

Pacific Century Trust, which manages $70 million of ERS money, lost 33 percent last year, ranking it in the bottom 5 percent of similar portfolio managers, according to the pension fund's quarterly financial report.

Tanoue yesterday told ERS trustees that the bank has made a "thorough assessment" of its problems and has implemented several important changes.

The improvements include narrower duties for the bank's chief investment officer, Bill Barton; establishment of a risk management committee under former Bank of America official Howard Hodel, the bank's senior vice president in charge of risk analysis for the investment division; and greater control of investment processes by the bank's top investment officials including Barton, Hodel, and senior investment portfolio manager Clyde Powers.

Tighter oversight by top risk management officers should help the bank prevent a repeat of last year's "very, very difficult" performance, Powers said. He blamed the bank's below-average performance in 2002 on poor stock selection and misplaced bets in sectors that underperformed the market.

"Those problems should be addressed through our new risk management process," Powers said.

Reach John Duchemin at jduchemin@honoluluadvertiser.com or at 525-8062.