Saturday, April 13, 2024

WILD COOT: BNB issue again


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The BANK OF NEVIS just published its annual report for 2013. It now has assets that total EC$455 million. It was hardly able to raise its legally required capital of EC$600 000 early in the 1980s when the bank started.
Despite the shortfall in capital, and with the consent of the then Governor of the Eastern Caribbean Central Bank, Mr Cecil Jacobs, it started operations. At first support for the bank was slow, but after a few notable citizens lent their support, both local and overseas persons became shareholders.
I am proud to have been associated with the bank during its first 12 years of operations. I performed the role of annual inspector and problem solver. Although not a member of the board of directors, I was always privy to the development plans of the bank. As an indication of confidence I even invested in a small amount of shares.
Although I did not play an active part in the future growth of National Commercial Bank of St Lucia Ltd after setting it up in 1981, I am certain that its future success and sale to Republic Bank was a positive sign of it doing well. But what about the Barbados National Bank (BNB)?
I agreed with most of the decisions made by former Prime Minister Mr Owen Arthur, but I have always said to him that the sale of BNB was not in the best interest of Barbados. His contention that has been again stated, according to the media report, is that the Government does not have to do what the private sector can do well. But the private sector can also run hospitals, for example.
Banking is so all-embracing in a developing country like ours that a national bank is needed as a catalyst in the system. I believe that his contention also pivoted on the Barbadian reluctance to invest in the bank.
I cannot agree with this point as more incentives could have been given to attract Barbadians. I also feel that if allowed, Barbadians could have improved the bank just like the Trinidadians. I see no difference in know-how. After all, Barbadians run Scotiabank and all the other foreign commercial banks. There is no superior intellect.
With regard to Republic Bank, I do not feel that the absorption of the Barbados Mortgage Finance Corporation into the mainstream banking was in the best interest of Barbadian society. It means that the only lower- and middle-income provider of mortgages has been lost except for Government. We see now where that has left us.
Look at the amount of money Barbadians have in the banks. Look at the number of Barbadian staff who daily run the other four commercial banks, the insurance companies and the credit unions, and tell me if Barbadians were incapable of making an even greater success of BNB than what has been done by Trinidad. The joke now is that Trinidad has taken out far more than it has put in and may take out even more.
With all confidence I set about converting the Barbados Savings Bank into a vibrant commercial bank. After two years of frustration I resigned and took that confidence to other Caribbean islands and further afield with success, as shown by the Bank of Nevis.
I am sure that with the right encouragement and further attractions by the Government (there were some at the start), the bank could have been equally prosperous or more than the Republic Bank appears to be.
There is no doubt that the minister of tourism deserves praise for whatever part he played in eventually getting a reduction in the airfares from Britain to Barbados and the Caribbean. This would be a solid boost to a critical source of our tourism market and the one with the longest staying tourists.
Harry Russell is a banker. Email


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