Some RBC Employees Feeling the Squeeze

Chief executive, Caribbean Banking at RBC, Suresh Sookoo in an interview on the sixth floor of his St Clair, Port of Spain office last week. —Photo: Mark Bassant

The media across the Caribbean has been highlighting the matter of whether Royal Bank/RBTT employees are being marginalized. According to our source employees are disappointed about the deafening silence of the local media – see Trinidad Express article.  Our source opines that in local banking circles RBC has become a laughing stock, the merger has done nothing except hurled the bank to the doldrums.

BU is being told personal lending has all but dried as a result of increasing delinquency. It is alleged the lenders at the bank are being told to move away from the mass market and to concentrate on the professionals groups like doctors, lawyers for example.

Workers continue to await the outcome of union and management of the bank but it appears to be a ‘Mexican Standoff’.  During the stalled talks employees are being severed, ‘final warning’ letters are given to those especially in  lending who have gotten a ‘low performance’ appraisal for the last two years, with the ultimate action being termination if improvement is not shown.

Prime Minister Urges Financial Institutions to Lend Money to the Hospitality Sector

Submitted by Due Diligence

Prime Minister Fruendel Stuart

Thanks David for the link to the PM’s testimonial for Ocean Two at  https://bajan.files.wordpress.com/2013/08/untitled1.mp3. Not being familiar with the Ocean Two property, I checked it out at TripAdvisor which confirms the PMs glowing report. It is great to read.

It is a bit confusing why the PM would single out one property for endorsement; but there has to be a reason. The PM’s remarks about its secrets of success being underpinned by “serious Investment” are obvious. His comments that “The splendour of the surroundings speak with moving eloquence of the commitment of the owners of this property to investment in the property” are indeed eloquent.

One should bear in mind that the amount of investment required for a property of this size is not “chicken feed”. If Peter DeFreitas’ motivation to make such a significant investment is to support the Barbados tourism industry, he is to be commended. If his motivation is to earn a Return on Investment, only he and his lawyers, accountants and bankers know if he has been successful.

The Road to Sustainable Growth

Submitted by Due Diligence

We hear from the Minister o Finance (and others) that the road to recovery and

Royal Bank of Canada

sustainable growth is constructed on such things as:

• Increased Competitiveness
• Increased Productivity
• Increased Efficiency
• Accountability

Sounds great; but the key is  in the execution. The same principles, of course, apply to both the public and private sector.

The article on Page 3 of Barbados Today illustrates an example of execution of those principles in the private sector.

According to the article, RBC is clamping down on those employees (mainly those  employees absorbed in the merger with the former RBTT) whose performance has been substandard – those who have performance gaps in meeting targets, deadlines etc.  Making them accountable for their lack of productivity.

Scotiabank Bond a No Go

Submitted by Napolean Bonaparte

UWI, Cave Hill,Barbados

So what is the next move now? Starcom 5.30 pm afternoon news, (but not CBC TV) informed the listening public of the latest twist regarding a $190 million loan facility arrangement supposedly effected to the benefit of UWI …. to be repaid by the government of Barbados.

Scotiabank spokesperson informed  a big no way Hose` as the proposed arrangement was not within their required lending specs. So where has this idea originated from or should we say “floated”?

Could never really comprehend the meat of this matter totally, as details given were always rather sketchy. Matters of  a Jazz J Bonds must say or the likings of the kind. Egg and more egg on faces too will follow, but more importantly how will the UWI function this academic year, given an  additional 2000 students were said to be taken on the strength of this now hiccuped arrangement?  University staff too shall soon be dreaming up horrors and even bigger unsecured fright nights over the coming months if some new arrangement is not put in place before Halloween.

There again which worker in Barbados won’t be?

RBC Employees in the Bahamas Fear Job Losses,,,Next?

Nathaniel Beneby, head of RBC Bahamas

BU has been asked to highlight the fact that RBC has started to retrench workers in Bahamas. Ever since RBC acquired the assets of RBTT in 2007 interested observers have been waiting for the hammer to drop on staff as a result. When two business entities come together there is always an inevitable result.

The BU household sympathizes with those RBC employees who will likely lose jobs in this guava season BUT this is the way business (especially Big Business) operates. A recent example of significant restructuring which resulted in the loss of jobs is LIME formerly Cable&Wireless. The government of Barbados will not want to hear about RBC (banks) sending home employees at this time although there is hardly anything our banana republic governments can do to prevent it.

See link to article received from a concerned employee:

• Will the Christie Government sit back and allow RBC to fire as the bank fail to believe in Bahamians?

Canadian Government Continues to Hunt for Tax-Avoiders

Submitted by Not Taken

Canadian government has Cameco in its sights for $800 million – Photo credit: The Globe and Mail

Yet another interesting (scary for Barbados) article – Cameco’s $800-million tax battle. I have been sending these recent articles  as a public service so the Minister of Finance (MOF) and Governor of the Central Bank have a heads up on the attack on Canadian tax evaders/avoiders that is undoubtedly about to hit the Barbados offshore industry; if in fact it has not already hit – but unreported.

This is very bad news for Barbados revenue sources. While the Cameco case involves its Swiss subsidiary, it is probably just the tip of the iceberg in CRA’s efforts to collect taxes due to Canada. There must be hundreds, if not thousands, of  Canadaco (Barbados) Limited businesses doing the same same transfer pricing schemes (scams) in order to pay 2% income tax to Barbados, rather than 27% to Canada.

Even those Canadian companies not not already being audited for this this type of tax “management” may decide for close up shop in Barbados to avoid the publicity that a CRA audit will bring.

Notes From a Native Son: Are We Seeing the Beginning of a Chasm Between the Ministry of Finance and the Central Bank?

Hal Austin

Introduction:
We must all offer our congratulations to finance minister Chris Sinckler for having the bravery to change his mind about the management of the economy. One can only imagine the amount of pressure that was on him, mainly from the DLP’s private economic advisers and the central bank governor, to continue down the policy cul de sac of a stubborn rush for growth at the end of which was national destitution and even more street crime. His decision to launch a Bds$600m economic stimulus is brave, and right, even if it has come a little too late. However, it is better to be late than never.

The challenge now for the minister and his senior advisers is how are they going to source this $600m that is now urgently needed and, once it has been found, how is it going to be spent. He must not resort to posturing or rhetoric and doing dodgy arithmetic to arrive at the numbers. Of course, as I am often reminded, the government is not in need of economic advice from me, nor am I offering it; but, instead of borrowing from external agencies, and incurring even more debt, the minister should dig in to the $1.2bn in foreign reserves which is money left idle, similar to old ladies putting their life savings under the mattress. This would be a much better and prudent strategy than robbing future generations of pensioners by taking it from the national insurance scheme.

Notes From a Native Son: Before Voting, think with your heads and not your hearts

Hal Austin

Introduction:
When the voters of Barbados enter the polling booths on Thursday, it will be an enormous challenge for them to abandon old political tribal loyalties and objectively put the nation, future generations and their own futures before irrationally supporting a party or candidate they have always supported, while suspending reason. The harsh truth is that this is the most testing general election, not only since November 30, 1966, but since the early 1950s and the introduction of internal self-government.

In the new globalised world, there is no turning back for small nation states such as Barbados. New global organisations, such as the World Trade Organisation and the newly re-energised International Monetary Fund, now have power over small states, mostly wrapped up in international treaties, that they have never had before. At the same time, rich and powerful nations are subsidising their farmers and industrialists, such as car manufacturing and farming in the US, farming in the EU, and a long list of state-owned or controlled industries in China, which put further pressure on small states. But we are not just economic people, as a nation we are rounded with equal value given to our social relations, our civic and moral responsibilities and our cultural and creative environment.

Increasing Government Productivity:
One of the biggest drags on growth in Barbados is public sector efficiency, from improvements in technology, competent management to output per person. One only has to read the annual report of the auditor-general to see the extent of public sector incompetence. Take a simple, but important example, uncollected VAT. Value added tax is a sales tax paid by consumers and collected by trades and service people. For convenience, that money is paid to the government at pre-set dates – monthly, quarterly etc. However, in Barbados, there is a huge backlog of payments, of business people failing to handover to government monies collected on its behalf.

Notes From a Native Son: Captain the Ship is Sinking – Is Worrell the Best Man to be in Charge of the Central Bank at a Time like this?

Hal Austin

Introduction:
In the preface to its recent Alternative Worlds report, the US National Intelligence Council observed: “The world of 2030 will be radically transformed from our world today. By 2030, no country – whether the US, China, or any other large country – will be a hegemonic power. “The empowerment of individuals and diffusion of power among states and from states to informal networks will have a dramatic impact, largely reversing the historic rise of the West since 1750, restoring Asia’s weight in the global economy, and ushering in a new era of “democratisation” at the international and domestic level….”. In other words, even at the highest level of the inward-looking US, there is a realisation that the world is changing.

However, reading the over-optimistic, even fictional, recent central bank review of the economy and projections for 2013, one would not get this impression. The report tells us the fiscal deficit is growing, up from 5.2 per cent April to December 2011, to 6.2 per cent in 2012; personal taxes are down ten per cent and VAT fell by two per cent for the same period; subsidies to government entities rose by two per cent and interest rates rose by four per cent. Public sector debt is 54 per cent of GDP, and including the national insurance scheme, it rises to 83 per cent of GDP. But, in about or real optimism, the review predicts that growth over 2013 will be 0.7 per cent, based on the IMF predictions of growth in the US, UK and Canada, our major trading partners. Apart from the fact that I was under the impression the Caricom was our major trading bloc, to base projected growth of the Barbados economy on the projections for those three economies is economic lunacy.

Notes From a Native Son: This is the Year When Our Long-term Future Will be Decided

Hal Austin

Introduction:
As we enter the dawn of a new year, all attention will be focused on the coming general election and, for some of us, the paucity of ideas battling for votes from a badly informed electorate. As things stand, it is largely a competition between tweedledee and tweedledum, although the recent injection of a broad, if under-articulated, idea of privatisation has raised its head.

However, even this glimpse of an ideological difference has been crowded out by the yahboo background noise of party humbug, rather than a rational discussion of the notion that firms owned by the private sector are in themselves inherently better managed and more efficient than those held by the public sector or social enterprises. Such closed mindedness also acts to shutdown debate, the arguments become irrelevant, as by definition people are either for or against the idea under discussion.

Now, as I have said here before, the world is entering a new phase in which the old economic assumptions are now redundant and the new global economic (and military) power will be centred in the early part of the 21st century in Asia and to some extent, Latin America. Therefore to understand what is taking place and the possible outcomes, one needs to read the runes carefully.  For a little island state, proud of its independence, careful observation is more important now than at any point in our history.

Barbados National Bank Officially Dead

BNB Logo

Republic Bank (RBL) recently rebranded Barbados National Bank (BNB) with the Republic Bank blue. It pained many Barbadians to witness WE bank sold to “others” and it pained further when the BNB brand was dismantled and replaced with RBL’s. If it WAS any consolation, central government and the NIS owned a minority shareholding which gave hope that the holding may have served as an avenue to reclaim the bank at some point in the future. Sad to say, wishful thinking!

The recent offer by RBL to purchase minority shares was successful. According to 187 of the Companies Act because 90% of the offer was taken up, it gives RBL the right to acquire ALL dissenting shares.

The letter attached dated 17 December 2012 confirms RBL’s intention to invoke that right pursuant to the Companies Act. By the end of the year RBL in all likelihood become the100% owner of the former BNB.

Here endeth a national symbol.

Notice to Dissenting RBL Shareholders:

Letter one, two and three.

National Insurance Board Wants Equity Stake In Republic Bank Trinidad

Dr. Justin Robinson, Chairman of National Insurance Board

“In light of this, Dr. Robinson indicated that, “The NIS is looking at all of the options right now. The options are that the NIS could decide not to sell any of the shares it has, it could sell some or it could consider an exchange of BNB shares for Republic Bank shares.”

The Barbados Advocate

BU wishes to commend the Board of the NIS Scheme for stating a coherent position regarding the options under consideration regarding Republic Bank’s offer of $5.00 to buyout minority shares. If Republic Bank is successful it means the Trinidad owned bank would 100% own the former national bank of Barbados.

Chairman of the NIS Dr. Justin Robinson is on record confirming that the NIS Fund is cash rich and the Republic Bank is on record it wants ALL of the shares. The two stated positions make the third option favoured by Dr. Robinson the most sensible investment strategy for the NIS and Barbados.  Why should we not seek out an equity stake in one of Port of Spain’s leading companies? T&T capital has acquired many Bajan companies. It is time to confront the hegemony of Trinidad.

Notes From a Native Son: Are Cross-border Banks Giving Barbadians Good Service?

Hal Austin

Introduction:
Republic Bank, in a brave move, has announced its intention of taking the former Barbados National Bank in to wholly-owned control. The announcement has led to a muted discussion among some Barbadians, with the professor of economics at Cave Hill, Michael Howard, ‘advising’ local shareholders to sell to the foreign owners.

Apart from the principle of clean hands, the professor’s advice, which also includes keeping the local subsidiary out of the hands of the government, appears to lack any real understanding of banking and its role in intermediation and, even more, economic growth. It is silly advice and should be ignored. Of course, there is no doubt that Republic Bank has behaved impeccably in its dealings both with the Barbados Stock Exchange and investors, but with other unscrupulous operators there is every opportunity in such a move to undermine shareholder value. Is the acquisition going to create value? What about cultural differences, or are they saying Barbadians and Trinidadians share a common culture? What stress and prudence tests have been applied? Retailing banking has reached such a comfortable state in the Caribbean that it is difficult to find common performance measures of success.

We know, for example, that customer satisfaction is not a measure shared by the former BNB, since Republic Bank neither formally informed all its account holders when it took control of the bank, when it changed its name, nor of its intention to buy out minority shareholders. In simple terms, it could not give a hoot what Barbadian shareholders think about their management style.