0

'Banking Desert' Fears Following Scotia Pull-Out

photo

Long Island MP Adrian Gibson.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Long Island's MP yesterday voiced fears his constituency will become "a banking desert" after Scotiabank unveiled plans to withdraw from four Family Islands with a series of branch closures.

Adrian Gibson told Tribune Business that the Canadian-owned bank's decision to close its "semi-operational" Buckley's site, and end its presence on Long Island, meant the island will no long have a physical branch following Royal Bank of Canada's (RBC) pull-out several years ago.

"I fear this will have a devastating impact on my people's access to financial services," he said, while nevertheless thanking Scotiabank for its "stellar service" to the island and long-standing presence as a key asset for the community.

However, noting the implications for Long Island's residents and private sector, Mr Gibson quickly added: "Given the withdrawal of the Royal Bank of Canada a few years ago, this will be felt even more because Long Island has essentially become a banking desert.

"Our island is comprised of largely middle aged to elderly people, so this will affect my constituents incredibly. You can imagine the elderly may not have access to online banking or may lack digital literacy."

Giving an insight into how RBC's pull-out impacted Long Island businesses, the MP added: "One businesswoman told me she has to catch a speed boat to Exuma every week after RBC closed to get funds for staff payroll and to deposit funds."

This, he acknowledged, presented both a safety and security risk, but highlighted the problems faced by Family Island communities as commercial banks rationalised their branch networks and exited unprofitable locations where their presence cannot be justified.

Scotiabank (Bahamas), in a statement yesterday unveiling the move, said it came in response to the current COVID-19 pandemic and was based on two key factors - a reduction in revenues and profits, and the increase in online transactions by customers.

It suggested the switch to digital banking, which it has increasingly been seeking to drive in The Bahamas, had reduced customer traffic at some branch locations by more than 50 percent. As a result, it Scotiabank (Bahamas) said it had decided to "consolidate" - meaning close - its operations on Abaco, Andros, Long Island, Paradise Island and Exuma into branches on New Providence.

The move, the bank added, will take place over the next four months and result in the transfer of all customer accounts to branches located on New Providence as it seeks to cut costs, and extract efficiencies and economies of scale, from pushing customers to mobile and online banking.

Roger Archer, Scotiabank (Bahamas) managing director, said: “While we have made the difficult decision to consolidate a number of our retail operations, these changes are necessary for our long-term viability and success as a business. We will make every effort during this process to minimise customer impact and preserve the employment of affected staff through redeployment, where possible”.

The bank did not respond to Tribune Business inquiries on how many staff will be impacted, and how many jobs may go, before press time last night. However, Scotiabank (Bahamas) said its decision was driven by "significant shifts in customer behaviour and transaction volumes over the past few years, which have accelerated since the onset of the COVID-19 pandemic".

It added: "Branch traffic in some locations has been reduced by as much as 50 percent as customers continue to utilise digital banking platforms." Scotiabank (Bahamas) Family Island withdrawal will open the way for digital providers and money transmission businesses, such as Kanoo, Omni and Sun Cash, to fill the gap.

However, Mr Gibson said poor Internet connectivity in parts of Long Island would make accessing digital financial services difficult for constituents. He also questioned the timing of Scotiabank's decision given that Long Island was being positioned for a post-COVID turnaround by infrastructure upgrades involving the airport and water systems.

The MP said he would again write to the minister of finance to see if there was a possibility that Bank of The Bahamas, in which the Government owns a combined 82 percent stake, could establish a presence on Long Island. And he also suggested that the commercial banks establish a shared services hub that met the needs of multiple islands.

photo

Peter Turnquest

"We desperately need financial inclusion as people are unable to access basic services," Mr Gibson added. K Peter Turnquest, deputy prime minister, in a statement said COVID-19 had "accelerated" the drive towards digital commerce "and these developments have caught up with us, unfortunately".

While the Government "regrets" Scotiabank's decision, especially the redundancies that will result, Mr Turnquest urged residents and businesses in the impacted islands to take advantage of the just-launched Bahamian digital dollar and other electronic means to meet their payment needs.

"We must double our efforts to further deepen and diversify our economy, projecting the future of work in The Bahamas and opportunities to move into different types of work, taking advantage of the technology and Fintech developments," he added."

Scotiabank said it will provide customer assistance for digital banking. It added that following the closures, the bank will still have nine branches across The Bahamas as well as over 70 automated banking machines - a network it plans to expand.

Comments

tribanon 1 month ago

The longer Minnis remains PM, the greater the likelihood we will have no Canadian banks with operations anywhere in The Bahamas. From a business and reputational risk standpoint, these foreign based banks are not fond of banana republics controlled by a corrupt dictator who is backed by the very sinister and evil Chinese Communist Party.

Minnis's refusal to get rid of the racketeering criminal enterprises run by the corrupt web shop bosses like Sebas Bastian and Craig Flowers has literally doomed our nation in the eyes of regulators of the global financial system. It's why the goal posts keep being moved so that we remain blacklisted. And a national lottery run by these same corrupt web shop bosses is totally out of the question because nothing would have changed in the eyes of the global financial regulators.

1

moncurcool 1 month ago

Come on. That's a total stretch. While you may have a dislike for Minnis, this has nothing to do with him. Canadian banks have been pulling back their operations in the Bahamas long before Minnis.

Just look at Grand Bahama. For years people have to wait over an hour to get served, and Scotia would not put one more branch in Freeport. They even moved out their system to Trinidad.

It's about them milking our country not about what Minnis may or nay not have done.

4

Clamshell 1 month ago

Correct. The Canadian banks have been paring back their Out Islands operations for years.

5

tribanon 1 month ago

@moncurcool: Just think for a moment about the very telling last sentence in your post immediately above. Then ask yourself: "What has Minnis done since May 2017 to put any 'milk' into our country for the Bahamian people?" Answer: "Nothing, absolutely nada!" Instead our very corrupt, incompetent, arrogant, nasty and vindictive PM has turned the taps wide open for corrupt and greedy foreign investors to milk our country like they have never done before. Wake up man.

1

moncurcool 1 month ago

The telling comment in my post is that you are trying to make the implication that Minnis is responsible for what Scotiabank in doing when in fact this has been happening prior to Minnis.

2+2 is not equal to 5 just becasue you say so. Line up the facts. Give the evidence and facts that Minnis is responsible. But don't allow dislike to leading to sprouting facts that do not line up

0

FrustratedBusinessman 1 month ago

I wouldn't blame Minnis for this one, these closures are nothing new. RBC had a big wave of them a while ago. The banks only care about one thing, their bottom line, and it is becoming increasing harder to justify keeping less trafficked physical locations open in the era of online banking. Unfortunately, the less-tech savy seniors end up suffering the most.

3

concerned799 1 month ago

You are saying all the Canadian banks will reopen all their branches if the PLP was back in power? Seriously?

1

jamaicaproud 1 month ago

Good. this is in keeping with Bahamalands move to Bahamian only. Scotia caught the drift and self deported.

0

tribanon 1 month ago

Have you ever heard: "No man is an island, entire of itself."

Another version of it goes: "No nation of islands, entire of themselves."

0

jamaicaproud 1 month ago

I have heard it of course. But unfortunately most people "here" haven't.

0

tribanon 1 month ago

Yep, things are now so bad that even the foreign banks can't find anymore 'milk' for the taking from our country, even though Minnis has turned all the taps wide open that used to provide a bountiful flow of milk.

1

sheeprunner12 1 month ago

This is just another ongoing example of our refusal to develop our indigenous banking and credit union sectors ........... while depending on Canadian banks to service our many islands. Commonwealth Bank or the main Credit Unions have not seen fit to expand beyond the urban centres .......... so, we cannot depend on the local private banking sector.

Then there are the webshops and FX outflows ................. and that is another serious concern.

Even though our tax payers' monies go to bail out a handful of PEPs at Bank of The Bahamas, now is the time to use this national "asset" to drive the banking needs of Government departments and civil service and get BOB out of the fiscal muck that its in.

Either that, or open up and modernize the Post Office banking system to replace the Canadians.

0

jamaicaproud 1 month ago

Its hard to develop banking without scale.

0

DonAnthony 1 month ago

How may billions in profits have these foreign banks repatriated over the last 50 years? The solution to this disenfranchisement of our family islands is simply the central bank should require as a condition of obtaining their business license that each of the major commercial banks have at least one physical bank in one of our less populated family islands. Also would Bahamians please whenever possible patronize our Bahamian banks.

0

sheeprunner12 1 month ago

How many "Bahamian" banks do we have??? ........... After all, is it not Scotiabank(Bahamas)Ltd?????? .......... But no 242 heart, soul or conscience.

0

DonAnthony 1 month ago

We have three 100% owned Bahamian banks.

0

jamaicaproud 1 month ago

That is the nature of business. Profits. To have good profits you need a good customer base, aka numbers. The obsession with driving away potential investors aka foreigners is not good for business in a country with a relativity small population base, and its even worse in islands with small populations. Anyway with a digital economy, it should be no big deal.

0

BahamaPundit 1 month ago

The scary fact is not that modern society is rapidly changing but that the only way to prepare for these changes appears to be to learn how to fish.

There may soon be a huge job crisis in The Bahamas and elsewhere, with Multinational Enterprises consolidating operations into a few technologically savy countries and using solely digital platforms to service overseas clients elsewhere.

CoronaVirus has sped up the complete digitization of the global economy, and, likewise, its transformation into a mostly jobless, automated, downloadable App.

Complete digitization is cutting out the middleman, satellite office branches in countries. Soon, international banks, such as Scotia, could have no physical presence in The Bahamas. Likewise, a manufacturer in China could sell directly to consumers in The Bahamas, without the need for a physical wholesaler or retail location.

Where will the jobs come from? Learn to fish.

0

sheeprunner12 1 month ago

If we were to look at First World countries, how are their banking regimes set up??? .......... rural France, UK, USA, Germany, Japan, New Zealand, Canada???? ................ Are there NO banks in these countries????

Is it totally unreasonable to expect that banking institutions exist in our rural areas????

0

BahamaPundit 1 month ago

In the next couple years, I anticipate a complete eradication of cash. All tansactions will occur with phones. If there is no cash, there will be very little need for a physical bank. Banks as we know them may, very well, be a thing of the past and go extinct altogether.

0

tribanon 1 month ago

Yep, and the great life in The Bahamas that we all once knew is rapidly coming to a calamitous end. Good luck banking in a cashless society without affordable and reliable electricity and internet services. But none of that will be of any concern when we have a serious shortage of fresh drinking water.

0

bcitizen 1 month ago

Good luck with that the next time a hurricane hits and the power and internet is down for days or weeks and with a Dorian class storm for over a year in some places. For months after Dorian cold hard cash was king.

0

sheeprunner12 1 month ago

THAT IS WHY THIS STUPID IDEA TO GO CASHLESS IN THE FAMILY ISLANDS IS UNREASONABLE, RUSHED AND UNSUSTAINABLE ......... BASED ON OUR CULTURAL AND ECONOMIC REALITIES.

0

Sign in to comment