By NATARIO McKENZIE
Tribune Business Reporter
and NEIL HARTNELL
Tribune Business Editor
Spanish Wells and Bimini were yesterday said to be in “uproar” over Royal Bank of Canada’s (RBC) decision to close the only commercial bank branches on their islands, with community leaders already reaching out to other institutions as potential replacements.
Robert Roberts, chief councillor for Spanish Wells, told Tribune Business that the community had effectively been blindsided by RBC’s latest Bahamian consolidation, saying the bank had given no prior warning of yesterday’s announcement.
The Canadian-owned institution, which acts as the Government’s banker, unveiled plans to close four branches, the other two being its locations at Lynden Pindling International Airport (LPIA) in Nassau and Treasure Cay.
RBC told Tribune Business that all four branches will be consolidated with remaining locations, starting with the Treasure Cay branch, which will be merged with Marsh Harbour on April 7, 2017.
That will be followed by the LPIA branch’s consolidation with RBC’s Cable Beach operation on May 19, with the Bimini and Spanish Wells locations to be merged with Freeport and Harbour Island, respectively, on May 26 and June 23.
RBC declined to confirm how many staff will be terminated as a result of the consolidation, although sources suggested it was designed to minimise redundancies, especially at LPIA and Treasure Cay.
However, given that they are on different islands, it will be far harder for RBC’s existing Bimini and Spanish Wells staff to transition to their new locations, likely making some job losses inevitable.
One source familiar with RBC, speaking on condition of anonymity, suggested that based on the small size of the branches involved, redundancies were likely to number in the ‘low double digits’ around 20-30.
Robert Farquharson, the director of labour, told Tribune Business his office had not received any information regarding lay-offs at the bank.
“We haven’t heard of any lay-offs there in recent times. Royal Bank is an excellent corporate citizen. If they had any plans to lay-off staff they would have come to us and notified us, and ensure that they were complying with all the rules and regulations,” Mr Farquharson said.
RBC’s move will likely cause immense frustration and inconvenience for Spanish Wells and Bimini residents, who will now have to leave their island - and incur extra cost and time - if they need to visit a physical commercial bank branch.
“This is not sitting well over here,” Mr Roberts said of his fellow residents. “This was done with no consultation with the Spanish Wells community. What are businesses supposed to do? Travel with money to Harbour Island?
“That’s inviting all kinds of problems. How are the elderly going to cash their National Insurance cheques. This has caused an uproar.”
Mr Roberts added: “Royal Bank has been here, I’m told, for more than 50 years. We have been banking with them for more than 50 years, and they just pick up and leave.
“I can tell you they were getting a good deal of traffic in that bank, and with the businesses we have here, this is just unbelievable. I really don’t know what’s behind the decision, but no one spoke to us, and the impact this is going to have can’t really even be explained.
“I have had people come to me and say maybe we should just walk in and demand our money. There has been no full-time manager here, and all of the commercial accounts are handled out of Nassau. They have been trending this way for some time. I can tell you that we have already reached out to another bank so we can get them to come down for a visit and we’ll see what happens.”
And one Bimini resident, speaking to Tribune Business after RBC announced the impending closure of that island’s branch, said: “Please tell me someone has thought this out and there will be a new bank in Bimini, with sufficient time for businesses to open an account.”
K P Turnquest, the FNM’s deputy leader, told Tribune Business that the loss of their sole commercial banking branch could be devastating for Family Island communities such as Spanish Wells and Bimini.
Apart from making them more isolated, he said it would impede and complicate their ability to access the local and international financial system, and undermine the ability of companies to conduct business and trade.
Describing RBC’s move as “a disaster”, Mr Turnquest said: “We’re regressing in the Family Islands under the PLP, and that’s regrettable.”
Mr Turnquest said some businesses would also find it difficult to complete payroll, while workers may have nowhere to deposit their earnings and keep them safe without a bank being present.
He warned that the absence of any commercial bank presence may deter foreign direct investment (FDI) from going to those locations, expressing particular surprise that RBC would pull-out of Bimini, given the significant economic activity and high employment rates generated by the Resorts World Bimini development.
Ultimately, Mr Turnquest said the absence of banking services threatened to de-populate Family Island communities, sending increasing numbers of residents to Nassau in search of work.
“It’s going to make it very much harder to do business for local communities and the private sector, and very difficult to acquire credit,” he added.
“It’s much more difficult to attract investment to those destinations. There’s no easy way to do business. It’s inconvenience and frustration for residents and businesses. It may cause an exodus of residents and businesses, not to mention the jobs that will be lost as well.”
Comments
John 7 years, 8 months ago
This is the longest period in its some 100 years of operation in the Bahamas that RBC has gone without turning a profit. At least one significant to satisfy the bosses in Canada and to resume the paying of dividends to common shareholders. And seems the more RBC tries to right size itself and become a more efficient and profitable operation, the more hurdles are thrown in its way. In the US unemployment is at its lowest level it's been at in fourth years and the housing market is the most active it's been in 25 years. Here in the Bahamas unemployment still remains in double digits and the housing market hasn't rebounded from the 2008 economic recession. Lending is still quite risky and many potential borrowers cannot meet RBC lending criteria. The bank may even consider exiting the Bahamian market.
Well_mudda_take_sic 7 years, 8 months ago
You are truly ignorant of what's happening in the Bahamas today. RBC long ago decided to wind down its operations and exit retail banking in the Bahamas on phased basis. The decision was made in Canada shortly after Crooked Christie's corrupt PLP government decided to 'legalize' the racketeering activities of the gaming web shops against the wishes of the Bahamian people as expressed in the outcome of a duly held national referendum.
John 7 years, 8 months ago
*Unemployment in the US is at its lowest its been in forty years
kdlrrl 7 years, 8 months ago
Highest number of Americans in history not employed - don't be fooled.
BiminiSands 7 years, 8 months ago
This was not thought out at all. I get it, banks make money primarly by making loans, how ever, mnay in Bimini do not take out loans. Never the less business owner need to function, employees need to cash checks, business owners need to deposit cash. For example, here at Bimini Sands, the cleaning girls, dock masters, maintenance personal are paid via checks which they then in turn cash. As a business operation we collect cash and deposit in the bank tto pay these employees. I am not a fan of government intervention on private business functions, but in this case, some one, I do not care who, needs to insure there is a functioning bank with enough time for a transition period. For those of you who say, " just do it online", you would not know that a considerable percentage of the poulation in the family islands are not computer literate, but that is a whole other conversation. That is my $.02
ThisIsOurs 7 years, 8 months ago
You can't force a private enterprise to operate what to them is a losing proposition. I hope a solution works out for Bimini but the reality is no big business cares about anyone over their profit margin. They will leave it if comes down to it. The real question for me is are they preparing to leave the country completely. The government recently moved all of its accounts from RBC to prop up the FAILING BOB, did that ill advised move start the death knell?
banker 7 years, 8 months ago
RBC has been quietly shopping its Bahamas operations for over a year. No takers willing to meet their price yet.
ThisIsOurs 7 years, 8 months ago
Same pattern as offshore bank past harbour bay, Selling everything for a quick exit
The_Oracle 7 years, 8 months ago
No doubt don't want to be in a market where the money ain't worth the paper it is printed on. Unlike Bahamians they can walk away! They've been here for over 100 years making good profits to expatriate back to Canadian shareholders, no different than foreign hotel owners. All of that is over courtesy of visionless corrupt Governments too focussed on control and limiting economic freedom, channeling success to cronies. Should have been a country of Bahamian owned villas, marinas and Boutique hotels but no, We need Anchors around our necks!
concernedcitizen 7 years, 8 months ago
I used to think that way too about Bahamian owned , but look at Bay st now .Its dirty , we are loud and intimidating .Overall its not a pleasant experience . We take no responsibility for anything . I take guest to the swimming pigs .We are now blaming the tourist for killing them when in reality the pond they drink from was dry and no one was supplying water .If not for the foreign owned hotels ,apart from a few in Abaco etc, we would be nearly starving .The guest I deal w/ on my family island all stay in homes now ,mostly owned by foriegners b/c they don,t want to put up w/ the bad service and additudes in the Boutique hotels ..
Porcupine 7 years, 8 months ago
I believe The Bahamas is entering into a very dark period. Aren't the signs all there for everyone paying attention to see?
banker 7 years, 8 months ago
True. I've been seeing it since 2007.
propane66 7 years, 8 months ago
I always found it strange that RBC had a branch at the airport in Nassau......consolidating that to Cable Beach or Old Fort makes sense to me.......
Spanish Wells consolidating to HI makes sense.......
I feel sorry for Bimini though.......
Govt increasing banking fees every budget, something has to tighten.....
ThisIsOurs 7 years, 8 months ago
They also moved their accounts from RBC to BOB, what did they think would happen? I wonder if Halkitis will claim that this was an unforeseen turn of events? You really have to wonder about the thought and effort put into their strategic planning
concernedcitizen 7 years, 8 months ago
Yeah but they still ran to borrow from RBC for the "hurricane money " ..Our government are not idiots ,they are a well oiled criminal organization
banker 7 years, 8 months ago
The airport branch was not strange. It was for deposits that "flew in" by briefcase and the carriers of such deposits immediately departed.
Socrates 7 years, 8 months ago
its all about profits.. more fees, less service.. use to call themselves the 'helpful bank'. i guess that means help themselves only. shame all of this. pretty soon we will be back to the days of the fly-in bankers like in LI and Inagua. once a week. keep ur money under the bed 6 days, bank 1 day. country going backwards and looks like there is nothing we can do to stop the slide...
DDK 7 years, 8 months ago
YOU CAN VOTE FOR THE BEST AVAILABLE POLITICAL PARTY.
JohnDoe 7 years, 8 months ago
Why are these discussions always viewed through political lenses. Mr. Turnquest what is happening with RBC has been going on with all of these foreign commercial banks under both the PLP and the FNM. Both parties have failed the Bahamian people in relation to how they have negotiated with these disguised foreign white collar criminals calling themselves commercial banks. Over many decades they have shamelessly taken from average Bahamians and repatriated those funds to their Canadian citizens with little investments in this country compared to those profits so that on short notice they can pull up stakes and move along.
concernedcitizen 7 years, 8 months ago
Our government borrowed up all the money from RBC .Would you rather have shares in Peoples penny savings bank , The development bank or BOB ,,Sorry but as a Bahamian I would buy RBC stock before any of those three well run ,lmao ,Bahamian institutions
DDK 7 years, 8 months ago
TRUE TOO JOHN DOE! THAT'S BANKSTERS FOR YOU! SHAME THOUGH.
banker 7 years, 8 months ago
RBC is re-adjusting and de-allocating resources from commercial banking to investment banking. Last reported, trading revenues were over three-quarters of a billion dollars, while employee head count and wealth management declined by double-digit percentages.
They can make a hell of a lot more money by trading stocks, bonds, derivatives and funds, than by having branches all over the Caribbean. For 100 years, it was the only way to make money, but times have changed. RBC is said to be investing close to $100 million in Artificial Intelligence to trade the securities markets:
http://www.itworldcanada.com/article/mi…
It's not worth it to have buildings, tellers and do stuff like cash cheques and give out loans anymore. It's now all Fintech, micropayments, and Machine Intelligence Trading using Big Data.
Since we don't even have a scintilla of a knowledge economy, and the human capital is so poor here with an uneducated workforce, RBC cannot and will not invest here.
Banking is changing everywhere around the world, except in our backward little corner called the Bahamas. We have been left behind.
There are now internet-based banks in North America that have no branches. They do have a hot line for help, but if you call it too often, they get rid of you as a customer. The wave of the future is very little bricks-and-mortar banks.
sheeprunner12 7 years, 8 months ago
Now is the time for Bahamian credit unions to spread into the Family Islands ........ a great opportunity for the Department of Cooperatives to mandate that these Family Island communities open their own co-op bank ........ stop relying on these foreign entities ..... Please no BOB ........ that is a failing proposition except the government sell off its shares to Bahamians
banker 7 years, 8 months ago
If we had an up-to-date banking infrastructure, we could deposit cheques like they do at Bank of America -- take picture of it with your smart phone, and start using the money 5 minutes later. But no, it still takes ages to clear a cheque. We are still in the dark ages of banking.
https://www.bankofamerica.com/online-ba…
That is why High Net Worth Individuals do not even want their money here anymore. Our infrastructure is not up-to-date enough for the times.
sheeprunner12 7 years, 8 months ago
Banker ........... you are not speaking to the average Bahamian ......... when a man has a cheque, he wants to cash it to buy his basics ........ when a person cannot buy a car with cash, he needs a loan ........ when a person needs a credit card for whatever ....... he needs a bank ....... now, in order to get a job, you first need a bank account ............ that is the reality of Bahamians (not much about your First World hissy fit)
banker 7 years, 8 months ago
No argument from me there about the reality of Bahamians. It is just rather unfortunate that it is the case.
All that I'm saying, is that the country is behind the power curve. With the RBC in Canada, one can open a bank account online in 10 minutes online or over the phone. Bahamians are not equal citizens to what is generally available to most people elsewhere. And it pisses me off. That is the substance of my rant. There is no reason why we shouldn't have the same banking perks here. However the infrastructure is not there. No credit bureau. No fast clearing house for cheques. etc etc etc.
JohnDoe 7 years, 8 months ago
The reason why we do not have an up-to-date banking infrastructure is that the business practices of RBC and the other foreign commercial banks have been more akin to a self-perpetuating colluding cartel than actual competitors. It is a totally rigged system against the Bahamian consumer and to the detriment of the Bahamian economy. Next to the incompetence of successive PLP and FNM governments in managing our economy, the historical business practices of these commercial banks is arguably one of the other major reasons why the historical growth rate of our economy has been so unimpressive. I am not saying that they have not done anything positive, however, the negatives in my view are jugular.
banker 7 years, 8 months ago
The whole idea of banks is to prey on the people with little money, and to suck up to people with a lot of money -- with the hopes of siphoning some of it off. Every single advancement of infrastructure or investment, is to increase the bottom line. If infrastructure investment will not contribute to profits, they won't do it. Jerry Munger, the partner of Warren Buffett has a term for it -- surfing. As long as the profits are coming in, they surf -- ride the wave. When the ride slows, they do an assessment. If investment will allow them to ride the wave some more, they will invest. If not, they pack their things and go home. Actually doing social and economic good is not in their charters. For any bank in the world.
DDK 7 years, 8 months ago
Brilliantly put, Banker!
concernedcitizen 7 years, 8 months ago
My Father was a responsible business man and a small developer .Over forty years he had no problem borrowing from RBC ,sometimes at higher rates when the economy was stressed . I was responsible and have overdraft on my checking from RBC .They lent a lot of money to responsible Bahamians , or do you prefer BOB where a 1/4 billion of our tax dollars walk out the front door to political cronies
JohnDoe 7 years, 8 months ago
Are you suggesting that the fact that a commercial bank provided loan facilities you and your father is newsworthy? The primary role of a commercial bank is to accept deposits and lend money. That is their identity, that is what they do. There is no breaking news there. Should I applaud them for lending Bahamians like you and your father your own money back to you at some of the largest spreads in the Caribbean. The issue is not the loan they may give to you or your father or some other Bahamian to buy a gold chain or other trinket. The issue is their collusive business model and practices at the macro level and its impact on our economic and social development as a country.
concernedcitizen 7 years, 8 months ago
We produce jobs and turned money w/ our loans ,,We are fast becoming a failed state and I,m tired of us blaming foreigners ...Banks are in business to make money, and we used that money to produce buildings ,jobs and feed families and make a profit at reasonable interest rates b/c we had proven to be a good risk and had built up some collateral ,mostly property to risk .And no our spreads weren,t some of the largest in the Caribbean ,even the short term construction loans .In fact my Dad just helped his last grand kid finish college w/ profits he made from the last apartment building he built w/ a loan from the Royal .
John 7 years, 8 months ago
Muddy _take_sic. RBC problems began ways before the web shops were licensed. Their problems are not limited to the Bahamas but they have scaled back operations in many other parts of the Caribbean. The stricter banking laws have caused them to get fines mounting in the millions. They have hundreds of millions on deposits that they cannot loan because hardly anyone can meet their requirements. So they have stopped paying interest on large deposits, and some are being charged monthly fees to have savings accounts at the Bank (negative interest). But not only does the new banking regulations affect RBC. Fidelity Bank had to give the Money Gramme franchise because it was tied to its banking license and allegations of money laundering at Money Gramme would have serious consequences for the clean bank. BoB also had to close its operations in Coral Gables under suspicion that the bank was being used to launder money. Now the US is requesting information on every company in the Bahamas. They are using the threat of terrorism to invade private banking and companies.
bogart 7 years, 8 months ago
Investigations are needed, have been needed but no wannabee aspiring politicion have called for any. They all want to be elected to run a billion dollar Bahamian economy first without asking themselves who would trust anyone if they cannot do the simple things first and call for an investigation.
Well_mudda_take_sic 7 years, 8 months ago
I'm sure Crooked Christie's nationalization of Sarkis Izmirlian's Baha Mar investment for the benefit of his Red China cronies has also played a big part in RBC's decision to begin phasing out its retail banking operations in the Bahamas.
BaronInvest 7 years, 8 months ago
As long as the Bahamas has a hostile stance against foreign investors you will see your economy going down more and more. Personally i ran out of patience, sold/rented all assets and relocated back to europe where we just rehired staff.
At this point i don't even care about my expired temporary residency (which we reapplied a year ago without response) or the permanent one as i don't plan to come back anyway. I know at least 5 other high-level investors who had a similar experience. Your government is simply too crooked and without bribing,wasting time & money you don't get anything done in this country. You cannot really blame the bank for pulling the plug - it's simply not worth it due to the situation the Bahamas are in.
Honestman 7 years, 8 months ago
Spoke to a friend from Barbados recently. He tells me his country is headed exactly the same way. Corrupt politicians tiefing the people's money and overseeing yet another rating downgrade to junk status minus one. Crime is also out of control. Barbados seems to be a mirror image of The Bahamas.
Gotoutintime 7 years, 8 months ago
Don't worry guys---Birdie will make everything OK!!
sheeprunner12 7 years, 8 months ago
Commonwealth Bank should move into every vacant RBC ........... Rupert Roberts did it with SuperValue ....... now it is time to do it with Commonwealth Bank ..... anything but BOB
thomas 7 years, 8 months ago
I'm sure webshops operating as clearing banks with out the fees or regulations is a factor. And the possibility of legal challenges to banks refusing to accommodate webshop deposit.
sheeprunner12 7 years, 8 months ago
Those Numbers Boys have the ear of the PLP Mafia ........ maybe they are one and the same ......... the Canadian banks have lost this market to the webshop pirates ............. Do we expect to read this in the next S&P/Moody's downgrade???
stoner 7 years, 8 months ago
Go direct deposit my friend and pay everything by debit card or Credit Card. You don't need a service bank in your community. All you need is a Bank machine that can be serviced by a private company. Banks branches are closing at an alarming rate and this is happening all across the Americas.The local branch is not profitable and always lose money for the institution. Deposit your pension check direct and all you need is a debit card issued by the bank or many other institutions.
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