The assets to be transferred from HSBC add up to $800m, out of its $1.4bn total assets on the islands, as at 21 March 2014.
The transfer is expected to be completed in the fourth quarter of 2014 and represents further progress in the execution of HSBC Group strategy, its holding company said.
Butterfield Bank (Cayman) is a wholly owned subsidiary of Bermuda’s The Bank of N.T. Butterfield & Son.
Last month, HSBC agreed to sell a portfolio of its Swiss private banking assets to Liechtenstein bank LGT Group Foundation.
In April, Butterfield Bank completed its acquisition of Legis Group’s Guernsey-based trust and corporate services business.