The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

SCOTIABANK (Bahamas) yesterday announced plans to “centralise’ some of its Bahamian back office functions into its Trinidad & Tobago hub, and is attempting to either avoid or minimise staff lay-offs as a result.

The bank, in a statement last night, said it will offer affected employees the option of applying for voluntary separation packages.

It did not indicate how many jobs will be impacted by this outsourcing/offshoring, but the move follows similar exercises that have been undertaken by its two Canadian-owned rivals, Royal Bank of Canada (RBC) and CIBC FirstCaribbean International Bank.

The latter is moving to cut regional staffing costs by 10 per cent, as all three institutions target restructurings and cost savings to ‘get back on track’ and return to profitability/greater profitability in a depressed environment.

The landscape is characterised by high levels of non-performing loans and loan loss provisions, and lower interest income. As a result, all three Canadian banks are targeting greater efficiencies and going where they can get ‘the biggest bang for their buck’.

Becoming the last to joing the consolidation club, Scotiabank said yesterday: “As part of our focus to continuously enhance the efficiency and effectiveness of operations, the bank is moving to centralise certain operations functions in the Caribbean, and has advised Scotiabank (Bahamas) employees of the local impact of this ongoing work.

“With operations in more than 55 countries, Scotiabank has formed regional operations centres in key markets around the world to manage structural costs while supporting our growing customer base.

“In the Caribbean, the bank runs ‘Shared Services Hubs’ in Jamaica, Trinidad & Tobago and the Dominican Republic. Certain operations functions in the Bahamas will be centralised into the Caribbean South Hub based in Trinidad & Tobago, following similar moves throughout Scotiabank’s Caribbean operations.”

Scotiabank added: “We are supporting our employees through this transition, and we are looking at all options to manage the impact on them.

“As part of this move, the bank will continue its practice of hiring from within where possible; will be providing training to prepare them to take on possible new roles within the bank; and will also be offering affected employees the option to apply for a voluntary separation package.

“ These decisions are never taken lightly – we have taken time to consider these changes in a careful way, being sensitive to the impact for our employees.”

Tribune Business understands that no forced lay-offs have taken place yet, and the bank is trying to avoid them, although staff are doubtless jittery.

Scotiabank (Bahamas) is not alone in trying to streamline functions and increase operational efficiencies. CIBC First Caribbean recently announced that the bank, which has a 3,500-strong workforce in the Caribbean, was looking to cut employee costs by 10 per cent.

Marie Rodland-Allen, the BISX-listed institution’s managing director for the Bahamas and Turks & Caicos, said it was set to make “decisions on redundant positions”, although she declined to say how many posts might go.

The Bahamian operation is thought to account for around 40 per cent of CIBC FirstCaribbean’s total business. But for the fiscal year ending October 31, 2013, it suffered a $17.9 million net loss on $168 million in revenue.

“Results were affected by several items of note, including $12.2 million in restructuring-related expenses, and increases in the specific and collective loan losses of $40.2 million and $4.1 million respectively” the managing director’s review of its year-end results stated.

“These contributed to a reported net loss for the year of $17.9 million. Excluding these items, the bank generated $38.6 million of net income for the year compared with $56.4 million in the prior year.”