The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Scotiabank’s regional head yesterday said the increased business volumes its Bahamas operation is now enjoying suggest that last year’s downsizing exercise is already bearing fruit.

Bruce Bowen, Scotiabank’s senior vice-president for the Caribbean, told Tribune Business that the bank had increased “new business” and customer interaction volumes despite a near one-third reduction in its Bahamian branch network.

Emphasising that no further downsizings were planned, he added that the performance of Scotiabank’s Bahamian staff had improved “night and day” compared to two years ago, and revealed that the bank is seeking to grow by doing more business with its existing customers.

Mr Bowen explained that Scotiabank wanted to “deepen” those relationships, and saw an opportunity to improve the average 2.2-2.3 products and services it provides per Bahamian customer.

The average ratio for world-leading banks, he added, was close to four products and services per customer.

Still, emphasising the progress made since 2014, Mr Bowen told Tribune Business: “Notwithstanding that we have a much smaller branch network, the volume of new business and new customer interactions with us is growing versus two years ago, when they were declining.

“If we stick with those core fundamentals, the things banks need to do right, and given that returns are lower than elsewhere, I think we’ll start seeing things moving up. It’s a pretty exciting time right now.”

Mr Bowen effectively implied that last year’s Bahamas downsizing, part of a global Scotiabank initiative, was a case of ‘taking one step back to take two steps forward’. The bank is now doing ‘more with less’, in terms of fewer employees and branches.

“A smaller branch network and fewer people are doing more business than 18 months ago, which means the restructuring was successful,” he told Tribune Business.

“It was a step back so you can manage your business better.”

Around 50 staff were expected to lose their jobs as a result of the restructuring exercise, announced on March 31, 2015, which resulted in six branch closures and the downsizing of two others.

Three New Providence locations were “consolidated” into other sites. Caves Village branch was folded into the Cable Beach location; the Wulff Road and East Street site was consolidated at Thompson Boulevard; and the British Colonial Hilton location moved into Rawson Square.

A fourth branch, Cooper’s Town in Abaco, was consolidated into the Marsh Harbour location, while two other Family Island sites - Stella Maris in Long Island and North Eleuthera - closed outright

Scotiabank’s remaining locations on Long Island and Eleuthera - Buckley’s and Rock Sound - were downsized to ‘service centres’, with reduced services and hours, and full-service ATMs.

The bank thus reduced its Bahamas branch network by almost one-third, from 21 to 15, as it moved to address concerns it was “over-banked” in the region.

Scotiabank was also seeking to cut costs, particularly labour and real estate-related ones, while exiting islands that have limited profit and growth potential due to their sparse populations.

Meanwhile, besides growing market share and gaining new business, Mr Bowen said Scotiabank was also seeking to do more with its existing customer base.

“I think we can also deepen the relationships we have with people,” he told Tribune Business. “If I just look at it from the bank’s perspective, the number of products and services per customer is 2.2-2.3.

“There’s an opportunity to develop that relationship. If you look at top quartile banks, they will be at or slightly over four.”

To aid this process, Mr Bowen said Scotiabank was investing in the training and motivation of Bahamian staff to ensure that the customer experience matched the financial products and services it is offering.

“We’ve got to provide a good value proposition, and there has to be a good experience,” he added.

“As institutions, we can do all we want to design great products and great pricing, but if people don’t like the people they’re interacting with on a daily basis, you’re not going to be successful.

“Sean [Albert, Scotiabank Bahamas managing director] and his team have done an awful lot in developing the right people. There’s more to do, but I see that the engagement level of our people is night and day compared to two years ago.”

Scotiabank has also previously outsourced back office functions from the Bahamas into its Trinidad & Tobago ‘Shared Services Hub’, which Mr Bowen yesterday confirmed was driven partly by the latter being a ‘lower cost’ jurisdiction than the Bahamas.

While many believe the Bahamas’ economic competitiveness is undermined by its relatively high cost base, Mr Bowen said this could be turned into an advantage, provided this nation positioned itself to attract higher margin industries.

“There’s a lot of positives to being a higher income economy, but that means you have to focus on higher productivity things,” the Scotiabank regional chief told Tribune Business.

He suggested that this was why the Bahamas was sought after for its wealth management and trust expertise, which requires “a different type of person that sitting in a call centre”.