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Dying? Financial Sector Is ‘Dynamic’

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Former Prime Minister Hubert Ingraham.

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

THE financial services sector in The Bahamas is “vibrant and dynamic,” former Prime Minister Hubert Ingraham said yesterday.

His view contrasts with Prime Minister Dr Hubert Minnis who told reporters over the weekend the sector is “dying”. Dr Minnis’ view was supported by Minister of Financial Services Brent Symonette, who later told The Tribune there has been a decrease in the sector over the past 15 to 20 years.

Mr Ingraham, former leader of the Free National Movement, said while the Bahamas will continue losing private banking business, which caters to high net-worth individuals, other elements of the industry brim will opportunity and remain strong.

“The financial services sector is comprised of many parts,” Mr Ingraham said during an interview with The Tribune at his law office yesterday.

“The part that many Bahamians know well was the banking side, the large international banks that have come here, the Swiss, Americans, Canadians etc and so people had accounts in The Bahamas at these banks.”

“Then the allegation was that people were hiding their money from the tax-man of the United States and from Europe, etc. The international community has taken a very aggressive approach towards trying to shut down such enterprises that are not onshore, meaning in New York, in London and elsewhere.

“So, we’ve taken a big hit and many, many jobs have been lost in the Bahamas as a result of that and so it’s fair to say that the private banking sector has decreased and declined substantially and will continue to do so for international persons who bank in the Bahamas.

“But our financial services sector is an evolving thing and we’ve been in this business for a long time and it is very dynamic,” the former minister of finance said. “It has included over the years Eurodollars, it included captive insurance, mutual funds; it now has ship registration, it includes trust administration, it’s now evolving to the point where wealth management and estate planning and family offices, investment funds and boutique firms have all been established. So the Bahamas has great opportunity for business in those sectors and to provide employment and other opportunities for skilled Bahamians. But on the private banking side, that business we have lost and we are losing the remainder of it.”

Mr Ingraham said though commercial banks have downsized in the wake of new technology and other factors, “that has nothing to do with trying to get additional businesses to go into the business of wealth management or boutique health facilities or call centres, etc. These are all services that can be broadly characterized as financial services in the country; banking is only one of those sectors.”

Mr Ingraham said such sectors could be developed to make up for the loss of private banking services. 

“We can be more vibrant and more attractive,” he said. “When it comes to family offices or investments funds and boutique firms, there are great opportunities for the Bahamas to attract some of those and to the extent the government can tweak legislation to attract more of those, they should do so.”

The International Monetary Fund (IMF), in a report accompanying its recent Article IV assessment of the Bahamian economy, said the financial service sector’s contribution to the country’s wider economy “has remained broadly stable” despite a 65 per cent shrinkage of the industry’s total bank assets between 2011 and 2016.

In terms of the financial services industry’s impact through a combination of jobs, tax revenues and local purchases of goods and services, the IMF said: “The overall direct contribution has remained broadly stable over the last 10 years, as the bulk of it originates from the relatively stable local expenses and employment, which are not sensitive to the asset size of the system.

“An orderly adjustment of the sector to global regulatory initiatives has contributed so far to manageable direct effects on the real economy, although it is difficult to determine the full extent of the impact—including spillovers,” the IMF said.

Comments

stillwaters 1 week, 6 days ago

With all these banks closing???? And with all the fees these banks are coming up with????

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Dawes 1 week, 6 days ago

I am not sure which article is the correct one. On the front cover is an article saying that Ingraham Raps the enterprise bill. In this one he says

“We can be more vibrant and more attractive,” he said. “When it comes to family offices or investments funds and boutique firms, there are great opportunities for the Bahamas to attract some of those and to the extent the government can tweak legislation to attract more of those, they should do so.

Isn't this what the enterprise bill is trying to do? So which one is it?

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sealice 1 week, 6 days ago

Banks are fighting to get out of here - downtown is a dump - the ministry of finance was so beat up over the past 10 years that even the PLP token White Boy had to quit cus he couldn't believe the crap the PLP was doing.... and now this fool thinks it's dynamic? Is he trying to plug Christie still?

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TheMadHatter 1 week, 6 days ago

All the people who have been benefiting behind the scenes for decades will now be steadily popping out of the woodwork to "make noise", now that they see opportunities being fairly distributed to the average Bahamian.

The lady whose family has like ten store in Baha-Mar. The lady who has all those stores at Nassau airport and was so very behind on rent, the family who owns thousands of acres of "former" Crown Land in Andros, the family who controls all the oil and gas, the cases where when you find out so-and-so owns such-and-such business you later hear that he/she also owns this business and that business and that business AND that business. All of them. Those are the ones you are going to keep hearing noise from about the opportunities that this new Bill/Act is going to create for the average Bahamian and take the power and control out of their hands.

There is no reason for people "over-the-hill" to be living with old broke up car, washing machine, and busted TV lying on the side of the road, outside toilet, and the communities looking so shabby.

Things are changing. And the Royal families are worried about living in a country where everyone is doing well, and so therefore they will no longer be well-er-er than the rest.

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DDK 1 week, 5 days ago

Interesting, Mr. Ingraham never mentioned the "web" shops.

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Porcupine 1 week, 5 days ago

There's a reason for everything.

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The_Oracle 1 week, 5 days ago

Follow the Money, Ingraham just singing for his supper. That's all he ever did. The real issue with legislating for (or for that matter against) anything is it fails to account for dynamic human endeavor, the variances of what you vs. I might see, or not see as opportunity. Quite frankly having to "renew" or re-apply year by year is a deterrent unto itself. But I suppose the government cannot allow unfettered success, it might get out of hand. God Forbid.

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banker 1 week, 5 days ago

Either Ingraham is very naive or he is ignorant of the facts, or he is out to lunch. As a financial services practitioner who saw an absolutely huge flight of capital from the Bahamas in the wealth management sector, I can categorically state that Papa is blowing smoke out of his rectum on this one.

Vibrant and dynamic, my azz.

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licks2 1 week, 4 days ago

It makes me wonder how complicit he has been in our "raping of the nation" that went on for decades!! He is making no sense to me. . .talking about overseas people taking too much from the Bahamians. . .he who approved and over 8000 jobs at Bahama and 5000 or so at the point. . . papa is beginning to look cheap to me now. I am surprised that he thinks that $250' 000 is too little for that bill! Then that means that the middle and lower classes will have no hope of taking advantage of the bill. . .only the elite. . .he and his friends!! I am disappointed with papa. . .I guess he wants the jailing and setting of right to all the dung going on in this nation to stop. . .or is he ashamed because he did not do a thing to make our nation right. . .and doc actions will show him up?

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