The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CIBC FirstCaribbean is aiming to triple staff levels at its new Bahamian private wealth management unit “in very short order”, a top executive yesterday unveiling ambitions for this segment to account for 25 per cent of the bank’s region-wide performance.

Dan Wright, regional managing director for CIBC FirstCaribbean’s private wealth business, told Tribune Business that the Bahamas would play a key role in achieving a 10 percentage point growth target that he wanted to hit “within three years”.

He said the Bahamas and Cayman Islands would be “the two most important” jurisdictions for CIBC FirstCaribbean in its private wealth management roll-out, with this nation offering “significant opportunities” for growth.

And the ‘exit’ decisions by Royal Bank of Canada (RBC) and other institutions will, Mr Wright added, likely accelerate CIBC FirstCaribbean’s initial private wealth growth rate beyond what it had projected.

Mr Wright was speaking to this newspaper from London ahead of the Bahamas unit’s official launch next Wednesday, when it becomes just the second of CIBC FirstCaribbean’s private wealth management operations.

“There’s no question it is a strategic priority for us,” Mr Wright explained of the private wealth management roll-out. “We identified private wealth as a strategic priority in 2012-2013 when I joined.

“The first office in Cayman opened last Spring, and the Bahamas will be the second official location, which launches next week.”

CIBC FirstCaribbean’s Bahamian private wealth management unit will be based at the Goodman’s Bay Corporate Centre on West Bay Street, which already houses the bank’s Bahamas-based trust company.

The private wealth unit will thus seek to leverage CIBC Trust Company (Bahamas) existing reputation, skills and client base to foster its early growth, as it targets high net worth Bahamian and expatriate clients.

“We will combine the new private wealth offering with the existing strength of the trust company, and a number of companies deciding to exit the market provides a significant opportunity for growth for us,” Mr Wright said.

And, in a likely reference to RBC’s recent decision to exit the private wealth management business in the Bahamas and wider Caribbean, the CIBC executive added: “Some of the announcements of late have given us early growth opportunities we did not know we would have.

“We made this decision we would be doing it regardless of RBC’s decision, but that will certainly help us grow faster than we may have otherwise.”

Rik Parkhill, CIBC FirstCaribbean’s regional chief executive, told Tribune Business last month that the bank was focusing on private wealth management as a key growth area region-wide.

He revealed then that CIBC FirstCaribbean had already been approached by RBC clients seeking another service provider who would allow their business to remain in the Bahamas.

Mr Wright, meanwhile, emphasised that, in common with the other regional territories where CIBC FirstCaribbean operates, the Bahamian private wealth unit would “focus” on Caribbean nationals and expatriates with “a nexus” to the region - second home owners, and investors/business owners.

It will thus have a slightly different client base to CIBC Trust Company (Bahamas) but, when combined, the two will enable the bank to offer a greater range of private wealth management services while leveraging off each other’s skill sets.

Mr Wright said the move would allow CIBC FirstCaribbean to offer both discretionary wealth management and advisory services, with the bank already planning for rapid growth in the new Bahamian unit’s staff numbers.

“Right now there are three, but we already have a number of job offers out to actually grow it,” he told Tribune Business. “We’d like to see it get to at least 10 in very short order.”

Mr Wright said the Bahamian private wealth management unit’s workforce would expand in line with client base growth, as a means of ensuring high service standards were maintained and not “bogged down” by individual managers having to deal with too many customers.

The Bahamian unit will be led by Brent Haines, who joined CIBC FirstCaribbean last summer from Credit Suisse.

Private wealth management, including CIBC Trust Company (Bahamas) and its Cayman-based counterpart, currently account for 12-15 per cent of the bank’s region-wide financial performance.

Mr Wright disclosed to this newspaper that he wanted to increase this weighting by around 10 percentage points, revealing: “I would like to see that grow to 25 per cent.

“I’d like to think we can do it within three years, and that includes the two trust companies. They’re the largest trust companies in the Caribbean by a long shot.”

CIBC FirstCaribbean’s decision to open its second private wealth management office in the Bahamas is effectively a vote of confidence in this jurisdiction, since it had 15 other Caribbean territories from which to choose.

Suggesting that the Bahamas, together with Cayman and Barbados, would be the institution’s “top three” private wealth management bases, Mr Wright told Tribune Business: “There’s no question that Cayman and the Bahamas are the two most important.

“We chose the Bahamas as our second location because we felt the opportunity was there, not only from a local talent perspective, but in terms of available resources, the reputation of FirstCaribbean and the opportunity for the Bahamas as an offshore jurisdiction.

“Our trust company in the Bahamas, from a results perspective, is almost as big as the one in Cayman, so there’s definitely significant opportunity here.”

Mr Wright suggested that too many financial institutions forgot that offshore clients chose to locate assets in nations such as the Bahamas for a specific reason, whether that be regulatory environment, proximity, travel or lifestyle-related.

Thus, when their existing service provider chose to either relocate or exit the jurisdiction, the clients often sought to keep their business in the same country via a different institution - rather than be taken elsewhere.

Emphasising that the Bahamas’ financial services prospects were bright, Mr Wright said that despite all the regulatory/compliance, economic and political changes of recent years, international financial centres (IFCs) were “still growing, and growing at a pretty good pace”.

This growth, he added, was forecast to continue for the next several years.

“The Bahamas has a good reputation, strong regulatory environment, and has a history as a leader from an offshore perspective,” Mr Wright told Tribune Business.

“You add all these things up, and the prospects for offshore markets, and places like the Bahamas and Cayman, they’re going to continue to grow. You may not see the growth rates prior to 2008-2009, but they’re going to grow.

“There’s always going to be a reason why high net worth individuals hold a portion of their wealth outside their country of origin.”