By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
A Royal Bank of Canada (RBC) executive yesterday said competition and demand have driven it to a digital banking platform, with 23,000 clients in the Bahamas already using its banking app.
Kevin Darling, RBC’s head of business banking for the northern Caribbean, also sought to justify the institution’s fee increases, arguing that these were intended to cover operating costs and ultimately reduce the need to close branches.
Addressing the 14th Abaco Business Outlook conference, Mr Darling said banks incur overhead and staffing costs, while also having to deliver returns to their shareholders. While many consumers continuously lament increasing bank fees, he argued that there was simply not enough lending activity to cover their costs.
“In today’s world there is not enough lending activity out there, on which banks traditionally make money on to cover all our cost,” said Mr Darling. “When you run a business, if you don’t have enough revenue to pay expenses, you either cut costs - which in our case would result in closing branches - or increase fees for services.”
He added that RBC’s Caribbean arm was now basically at the “break-even” point, having posted annual multi-million dollar losses in recent years. However, he affirmed RBC’s commitment to maintaining its presence in the Bahamas, saying: “We plan to be here a very long time.”
Many Bahamians are likely to be unconvinced by Mr Darling’s fees defence, especially since RBC has been consolidating its branch network in both New Providence and the Family Islands, reducing staff headcount and combining locations with its FINCO mortgage arm.
Mr Darling, meanwhile, also defended the RBC’s customer identification requirements. He said that since the bank was governed by multiple regulators in the Caribbean, it was held to a higher degree of responsibility with regard to Know Your Customer (KYC) requirements.
“I understand the inconvenience around ID’s. However, if we want to maintain our presence here we must fulfill our obligations,” said Mr Darling.
RBC also confirmed yesterday that the 75 per cent majority equity stake in FINCO, currently held by RBC Royal Bank Holdings (Bahamas), would be transferred to a yet-to-be identified entity within the RBC group by April 2019.
In a newspaper advertisement to FINCO shareholders, RBC said the transfer was required as a result of directives from the Central Bank of Trinidad & Tobago, which regulates its regional parent.
Comments
OMG 6 years, 7 months ago
If you don't bank with them and cash a cheque on someone who has an account there the fee is beyond ridiculous.
ohdrap4 6 years, 7 months ago
all fees at RBC are exorbitant. A visit to the ATM is 2.50 where it is about one dollar elsewhere.
I think they even charge for letters to verify the pensioners to the treasury.
And many employees are extremely rude.
those who bank with RBC must do so under duress or necessity.
tell_it_like_it_is 6 years, 7 months ago
Yeah and Commonwealth offers competitive loans. Maybe they should examine the competition.
Well_mudda_take_sic 6 years, 7 months ago
This comment was removed by the site staff for violation of the usage agreement.
John 6 years, 7 months ago
you sound like a jack ass
Well_mudda_take_sic 6 years, 7 months ago
I guess we know by whom your bread is buttered.
DDK 6 years, 7 months ago
He sounds spot on! Getting rid of the numbers scourge would see an immediate up-turn in our economy and outside perception of The Bahamas. Our Government is either short-sighted or greedy, probably both as they refuse to deal with these racketeers.
JohnDoe 6 years, 7 months ago
This is utter and complete nonsense based on wholly fake news and unsupported by any facts or economic theory. The commercial banks pay less than 1% interest on deposits and in fact Royal Bank is charging customers to deposit their money which is a negative interest rate. The same banks charge 12% on average for lending money, an incredible interest rate margin of 11%. These banks have over $7 billion of deposits from which to lend. Therefore, these banks are lending other peoples money (depositors) at an 11% interest margin and they cannot earn the required rate of return or compete with persons , who if they are lending would have to do so from their own equity. Beyond silly stuff and utter fake news. That's our problem, instead of you guys picking up an econ book you just trying to sound intelligent saying stupid stuff which is very dangerous.
sheeprunner12 6 years, 7 months ago
It is a vicious cycle ........ they lend and people default ....... they cannot sell the defaulted portfolios ....... they cannot find incentives to get the defaulters to pay ..... they put up the loan criteria ........ no one can qualify for loans ........ RBC hikes fees ............ smh
But the foreign banks never lose, they always win ......... or pull out of communities.
aristocrat 6 years, 7 months ago
why are we forced to pay a service fee to deposit funds into a bank, mean while the bank uses those funds to for loans while paying little interest. I find it very unsettling having to pay to deposit my money, pay to with draw it, pay for a printed statement if I need one, pay for using the ATM its a no win situation for the consumers. Something must be done to mitigate all of the additional fees being levied against consumers.
ohdrap4 6 years, 7 months ago
the consumers have no champion, the central bank does not care.
your choice is:do you pay 50 per month for unlimited transactions or you pay 10 per month and get nickel and dimed. all depends on the activity on your account.
some online transactions come at no extra cost, so you should take advantage of those, also use your debit card to make purchases and avoid the ATM fees.
the lowest fees are at fidelity bank.
Well_mudda_take_sic 6 years, 7 months ago
Our Central Bank governor (John Rolle) and his predecessor (Wendy Craigg) should both be hog-tied and subjected to a royal public whipping in Rawson Square!
John 6 years, 7 months ago
you sound like a bigger jack ass
Well_mudda_take_sic 6 years, 7 months ago
I guess you are among the very few who know that both John Rolle and Wendy Craigg are not at all averse to the numbers' bosses receiving a banking license.
banker 6 years, 6 months ago
Y'all know that mobile banking is the most unsecure form of banking that there is -- right? A professional hacker with the right equipment, within range of your phone, can clean your account out in minutes. The "right equipment" can fit into a small backpack, computer bag or shopping bag. Or it can be a laptop computer at a coffee shop.
ohdrap4 6 years, 6 months ago
use your old laptop, behind your own modem at home, and keep antivirus uptodate.
otoh, you can log on to your account and monitor all activity several times a day.
the bank will have to honour losses due to hackers getting into their system.
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