OPINION?LEADERS who bash banks end up compromising confidence in the financial institutions.
That’s according to managing director Robert Le Hunte of Barbados National Bank (BNB), who said when the impression was given that banks could offer higher interest rates on deposits than they were currently paying, depositors begin to think that banks were “robbing them”.
According to Le Hunte, who steps down as BNB boss and returns to the parent company Republic Bank’s group management in Trinidad and Tobago, said that in an environment where a minimum deposit rate was enforced, then banks’ interest expenses were fixed, even in environments where loan activity had slowed.
Le Hunte, who is also outgoing president of the Barbados Bankers’ Association said when people were led to believe they could gain more interest on their savings, they often put their deposits into questionable investments.
Pointing to examples of failed investment schemes in Jamaica, he said Barbados’ commercial banking sector was fiercely competitive but also well regulated.
He said even though the local banking sector was profitable, the expenses associated with branch banking, for example, were also very high.
“The point that people need to understand is that people will not put their money in a bank that they perceive is not profitable. There is nothing wrong with being profitable. Being a profitable bank inspires confidence in the institution.” (GE)
