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CBA expecting slight employment growth in banking sector

The Clearing Banks Association (CBA) is expecting a slight growth in banking sector employment over the short term, saying 0.5 to 1 percent is likely, depending on how the economy performs.

The estimate comes from the new chairman of the CBA, Ian Jennings, who is also president of Commonwealth Bank.  Provisional statistics recently released by The Central Bank of The Bahamas show a 0.45 percent increase in total employment for 2010.  Jennings told Guardian Business recently that that level of increment is likely to hold for the next few years.

“As a whole the CBA expects the 2010 growth rate to be indicative of the future, with some increase as the economy eventually moves into a growth mode,” Jennings told Guardian Business via e-mail recently.  
“This return to growth is expected to be gradual over a period of years.  The pre-recession employment growth rate is not expected to recur in the near future.”

Years 2006 and 2007 – the ‘pre-recession’ years – saw total employment at banks and trust companies climb year-over-year by 5.39 percent or 240 persons and 6.35 percent or 298 persons respectively.  By 2008 employment levels peaked, with 0.44 percent or 22 new employees bringing the number of total employed to 5,011 persons.  The contraction in the growth rate foreboded the impact the recession would have on the industry – 2009’s total employment tumbling by 106 persons or 2.12 percent.  That year also saw sector spending on training shrink dramatically, dropping to $1.9 million – a $1.3 million or 40.1 percent descent from 2008’s $3.3 million.   On a per-head basis, Guardian Business calculates the total training spending per person employed by a bank or trust company bottomed out at about $387 in 2009.  It was as high as $661 in 2007.  Provisional data for 2010 shows the per-head spend climbed to $447 – still far below 2007’s averaged training spend.

Those numbers were not adjusted for inflation, meaning that the ‘real’ spending in recent years may have been even lower than the unadjusted numbers suggest.

At least from the perspective of commercial banks though, Jennings is saying that if anything, training has actually increased.

“While ongoing training is important, much of this is provided in-house by CBA members and has not been reduced.  In fact, in some instances in-house training has increased,” according to Jennings.  
“Other training related to new systems tends to be associated with economic growth cycles.  This area of training has declined since the recession.  And in the area of overseas training, this has always been closely monitored to ensure its relevance and effectiveness.”

The number of Bahamians employed in the local banking sector actually grew every year from 2006-2010, though just barely in 2009 where it saw only 5 new jobs and a 0.16 percent growth on 2008’s number.  Still, compared to the 4.92 percent growth in 2006 and the 6.10 percent growth in 2007, corresponding to an addition of 139 and 181 jobs respectively, 2009’s increment was severely contracted over previous years.

Still, the number of Bahamians employed in trust administration may have seen the best recent growth results.  Employing much less individuals than local and offshore banking, the number of jobs there peaked in 2010, according to the provisional statistics, hitting 535 persons.  Employment there stabilized at 503 persons in 2007 and 2008, contracting by 2.6 percent in 2009 for a drop to 490 persons.  The sector added 45 to its number in 2010 for a 9.2 percent growth.

The number of Bahamians in offshore banking may have taken the greatest hit over the period, with 2009’s advance during recession of 31 jobs or 4.6 percent wiped out in 2010, that year showing 58 jobs lost for an 8.1 percent decline in employment.  Provisional data for 2010 shows 655 persons in that sector that year.

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