The Tribune

By FAY SIMMONS

Tribune Business Reporter 

jsimmons@tribunemedia.net

THE Opposition’s finance spokesman yesterday demanded that Bahamians be given greater protection against “inexplicable and indefensible” bank fee hikes as CIBC became the latest to unveil increases.

The BISX-listed bank has revealed that personal, business and corporate banking clients will all experience fee increases as of September 1. The greatest increases are in the monthly service fees, which will rise by 40 percent for personal banking clients, and 25 percent and 20 percent for business and corporate clients, respectively.

This prompted Kwasi Thompson, the east Grand Bahama MP, in a column published today, to call for “real financial consumer protection in The Bahamas”. He accused the commercial banks of continuing to “pile on” fee increases at the same time as they are cutting back services to consumers via branch closures and such like.

“We continue to witness banks in this country piling on more and more fees and charges on Bahamian consumers while providing less and less customer service. The Government must provide greater regulatory protection for Bahamians against increasingly inexplicable and indefensible cost increases,” he asserted.

“We are advised that a major domestic bank will be increasing their rates as of September. However, in December last year, it saw a strong financial performance for its 2023 fiscal year with net income of over $100m, up 74 percent from the previous year. A reasonable question to ask is why raise fees now?” Tribune Business research confirmed he was talking about CIBC Caribbean (Bahamas).

The bank’s revised fee schedule showed monthly service fees will increase from $2.75 to $3.85 for personal banking clients, while business and corporate banking clients will see a $3 increase from $13.20 to $16.50 and $16.50 to $19.80, respectively.

Withdrawal fees for personal banking clients will increase by 27 cents, and those for business and corporate banking clients will see a 16-cent increase. Deposit fees will also see an increase of 27 cents for corporate, savings and chequing accounts, while savings plus accounts will now have a $1.38 deposit fee after being zero before. Business banking clients will pay an additional 38 cents.

Last year, CIBC Bahamas reported net income $122.3m for its 2023 financial year, up 74 percent from the previous year. Jacqui Bend, the bank’s managing director, said the bank “delivered a strong financial performance”.

She added: “For the year ended October 31, 2023, the bank reported net income of $122.3m, up $52.1m or 74 percent from the prior year’s net income of $70.2m. The year’s significantly improved results were largely due to the revenue uplift from higher US benchmark interest rates.

“Additionally, as the economy continued to recover from the aftermath of the COVID-19 pandemic, transaction-based operating income returned to normalised levels, improving over the prior year.”

Mr Thompson, meanwhile, highlighted consumer complaints about “unreasonable” cash chequing fees and “non-transparent” ATM usage fees.

He said: “In some cases, fees have increased over 40 percent without explanation or justification. The reports by the Central Bank reveal that banking fees continue to rise every year. Banks have been removing their brick-and-mortar presence from Family Islands, which has caused great distress to islands like Andros and Long Island.

“The Government must act without delay. There must be improved and enhanced regulations covering indiscriminate and indefensible charges by the banks. The Central Bank must be mandated in law to require banks to justify fees and charges charged to customers.”

Mr Thompson said The Bahamas would benefit from stronger regulations to increase transparency, fair treatment, effective recourse and equal access. He added that the Consumer Protection Agency should be expanded to include a Financial Consumer Protection Agency and provide a bill of rights for clients and an enforceable code of conduct for banks.

Mr Thompson also suggested the implementation of a financial ombudsman with the authority to enforce corrective measures when commercial banks are found to be non-compliant or engaging in misconduct.

He said: “The Bahamas should have an agency or authority like the Financial

Ombudsman in the United Kingdom that is independent and has the clear power and authority to negotiate and impose pre-emptive and corrective measures in cases of a banking institution’s non-compliance and instances of misconduct. The Financial Ombudsman has similar powers to the Ombudsman but looks at banking and insurance matters.

“The Bahamas would benefit from an authority that has a range of enforcement powers and tools to allow it to investigate, powers of cease-and-desist orders, reprimands such as confidential caution or reprimand letters, and fines in banking and insurance disputes.”

Mr Thompson said commercial banks should be prohibited from engaging in “unfair” practices, and should be regulated to notify clients when their accounts are inactive or dormant as well as the fees or charges they will incur.

He said: “Financial Institutions should be held to account and should follow enforceable rules and standards on providing statements and reference letters free of charge, special provisions for senior citizens and the disabled, what statements should include (services, fees, interest rates and penalties). Also rules on notification on interest rate to be paid or charged on any account, any noninterest charge on any account of the consumer (transaction fees, overdraft fee).

“And rules on Banks notifying their consumers in case their transactional accounts have become inactive or dormant, and the related consequences, including applicable charges. The nature and extent of the change, particularly its potential impact on the consumer, should dictate the required format and the length of time for advance notice, and whether personalized, individual notification to the customer is required.”