By NEIL HARTNELL
Tribune Business Editor
Commercial banking industry consolidation and job losses are set to continue, after Royal Bank of Canada (RBC) yesterday unveiled plans to transfer its credit card unit to Trinidad & Tobago.
Multiple sources confirmed to Tribune Business that staff in the unit have been invited to apply for jobs elsewhere within Royal Bank’s Bahamian operations in a bid to minimise lay-offs.
It is unclear how many staff will be impacted. Royal Bank was said to have issued a press release on the issue yesterday, but it was never sent to The Tribune.
However, Royal Bank’s latest consolidation/downsizing move represents another step in efforts to cut costs and align expenses with reduced profits stemming from the commercial banking sector’s non-performing loan (NPL) crisis.
With $1 out of every $5 lent by the sector at least one month past due, all three Canadian-owned banks - Scotiabank and CIBC FirstCaribbean, as well as Royal Bank - have sought to cut costs via a combination of branch closures and outsourcing of jobs/back office functions to lower cost jurisdictions such as Jamaica and Trinidad and Tobago.
While Scotiabank and CIBC FirstCaribbean have both previously told Tribune Business that their consolidation in the Bahamas has finished for the time being, it appears that Royal Bank is still seeking more efficiencies.
It closed the Palmdale branch of its BISX-listed FINCO operation in November last year, transferring all operations and customer accounts to the nearby Royal Bank branch.
This was a continuation of the initiative, begun in 2014, to merge FINCO’s operations and physical locations with those of Royal Bank in a bid to cut costs and generate efficiencies in a difficult trading and economic environment.
Royal Bank has also shrunk its own branch network, exiting its Paradise Island branch last year, a move that it confirmed was intended to reduce costs and increase efficiencies.
Royal Bank, though, is in good company when it comes to downsizing Bahamian operations.
Scotiabank last year unveiled a restructuring in which around 50 staff were expected to lose their jobs, with six branch closures and the downsizing of two others.
Three New Providence locations were “consolidated” into other sites. Caves Village branch was folded into the Cable Beach location; the Wulff Road and East Street site was consolidated at Thompson Boulevard; and the British Colonial Hilton location moved into Rawson Square.
A fourth branch, Cooper’s Town in Abaco, was consolidated into the Marsh Harbour location, while two other Family Island sites - Stella Maris in Long Island and North Eleuthera - closed outright
Scotiabank’s remaining locations on Long Island and Eleuthera - Buckley’s and Rock Sound - were downsized to ‘service centres’, with reduced services and hours, and full-service ATMs.
CIBC, too, terminated 66 jobs in the Bahamas by October 2015, with 56 of those posts lost in the outsourcing of its operations group to Jamaica.
These downsizings represent the further loss of well-paying, middle class jobs for a Bahamian economy which is still struggling for significant growth to pull itself away from the aftermath of the 2008-2009 recession.
They raise further questions over the Bahamas’ economic competitiveness, and whether this nation has ‘priced itself out of the market’ for certain products and services.