The Tribune

EDITOR, The Tribune.

I am moved to write following a recent article whereby the Royal Bank of Canada announced that it was closing branches in Treasure Cay, Harbour Island, Spanish Wells and Bimini. Apart from the pain of adding Bahamians to the list of the unemployed what was the motivation for such an announcement?

Is the Royal Bank of Canada saying that it is not making any profit in these locations? Is that the key to motivating the closures i.e. PROFIT, PROFIT PROFIT?

It is only recently that all the banks substantially increased their bank charge fees causing an outcry for some form of price control. I can only assume that the motivation to increase bank charge fees was for profit, profit, profit. I am very much against Government getting involved with price control as not only is it none of its business but it eliminates the very essence of competition. It is only when competitive forces are “in play” that the public benefits.

When someone like a bank is in operation, especially in a foreign country, it forms part of the social fabric of the society.

As such there are, or should be, both moral and ethical considerations each of which should be a factor just as much as profitability.

In the case of the Royal Bank of Canada they have been in operation in the Bahamas since 1908 and should have a corporate indebtedness to the Bahamas where they have enjoyed privileges for over 100 years and have without doubt the lion’s share of providing banking services throughout The Bahamas.

Where was our Government in this decision process? Did they not remind the Royal Bank of Canada of their corporate obligations and the favourable treatment that they have been afforded over the many years?

I must confess I wondered about the change in structure about five years ago when the operations in The Bahamas were structured under a separate corporate umbrella as opposed to being a branch.

The significance of such a change meant that the corporate entity had to rely upon its own capital and reserves instead of those of its parent.

Even though the new structure appointed a veteran Bahamian Banker as its Chief Executive Officer I rather believe that he has limited overall authority and I very much doubt that the branch closure decision was taken by him. I believe that the decision was made in Canada and he was asked to implement same.

These are very disconcerting actions – (i) the change of corporate structure and (ii) the closure of well-established branches – are these the signs of the Royal Bank of Canada withdrawing from the Bahamas?

Is the Bahamas market considered too small in the Global world? Will their next announcement be their withdrawal from The Bahamas?

Unfortunately all the Canadian based banks seem to be following a similar pattern when it comes to a reduction of overall banking services in the Bahamas. Many functions have been transferred from the Bahamas to other jurisdictions in the Caribbean.

This outsourcing has also contributed to the number of unemployed while the quality of service has dropped dramatically. Is anyone in the Bahamas challenging these actions and defending the country’s best interests? – it would appear not.

My other concerns relate to who will fill the void created by the branch closures of the Royal Bank?

I sincerely hope that it will not be the Bank of the Bahamas attempting to open branches in these locations.

Their operations are highly questionable and lack credibility. The continual “bail-out” of their past indiscretions by Government who takes money from the people (in the form of National Insurance) is highly unethical and immoral.

Another alternative could be the “numbers houses/web shops”.

As these “numbers houses/web shops” are not able to deposit their takings with the major banks they are exploring other avenues for their excess cash accumulations.

It seems that they are looking into other activities such as banking and investing.

As the “numbers houses/web shops” were contrary to the Public Referendum, the Government chose to ignore the results and proceeded to “legitimised” their operations.

These entities are already seeking protection from competition and exclusiveness and thus it is highly conceivable that we could have a banking system that will not be regulated by The Central Bank which in turn will do The Bahamas even more reputational damage – especially with outside agencies such as IMF, World Bank, OECD, etc.,

FAIR & BALANCED

Nassau,

March 20, 2017.