Deltec Bank restructuring for growth

A little less than a month after a major role change for its top personnel, Deltec International Group (DIG) is swatting away rumors and touting its new structure as an opportunity to “put the right strengths in the right places,” with an eye to growth going forward.

Some recent decisions have left niggling questions the bank’s top executives have chosen to address: “Is the bank ready for the U.S. Foreign Account Tax Compliance Act (FATCA)?” may be topmost among them.

Jean Chalopin, CEO of Deltec Bank and Trust, and former chairman of DIG, addressed what he termed the “annoying” rumors directly. He said the changes that may have given rise to the questions are a matter of restructuring.

“We have no problems with FATCA. We have no problems with the Central Bank. I met the governor the other day and he said we are the best of the best on this island, so I don’t call that having trouble, you know?

“Somehow, we have grown a lot. We went from 22 people to 85 people. So we have grown a lot, and when you grow, you go through reorganization,” Chalopin said.

He explained that at the bank’s board meeting in November, the decision was made to restructure to ensure the continuation of growth.

“We are no longer a small company in the corner; we are a fairly large company for The Bahamas, and we’re going to continue to grow. We believe we’ll be about 100 people by the end of the year, so we’re growing, and for that you need structure. So we have to reorganize differently, but we are well and thriving. Yes, we have some change of organization inside; we have some people we believe are more effective outside than inside; we had persons that retired…It’s a thing that happens, but for us, we are very fine,” Chalopin said.

David Muñoz, CEO of Deltec International Group, offered some background on the institution. He explained that when Chalopin took over as the largest shareholder – nearly six years ago – he brought with him “a real plan to rebuild the business”. What, according to Muñoz, had been a very conservative, well-run operation had no real growth ambitions. Chalopin brought him on, Muñoz said, and together the two came up with a strategy to build the business.

“Our market has changed a lot, and it continues to change. We realize that a business of our size that isn’t huge, isn’t international and doesn’t have a brand name, requires intellectual capital, requires service, and we really focused on doing that. And Jean charged me with growing the business in a way that would deliver on those needs that clients were craving at that time.

“Clients were no longer craving the big balance sheet and the safety, because those big banks had proven that in a time of crisis, they weren’t really loyal to those clients. So we did that, and as Jean said, we grew from 22 to 85 employees, and our business grew commensurately with that, and that’s an important success for us,” Muñoz said.

He said those changes led to a consideration of the roles he and Chalopin had been playing: Chalopin as the holding company level, building the business in strategic ways, with Muñoz on the ground with clients, “augmenting the business”.

“We realized that we work very well together, and that in order to ensure that we could transition from that first phase of growth to that next phase where we were really solidifying the business, that it would make a lot of sense for us to switch places,” Muñoz said.

Chalopin pointed out that age was also a factor.

“I wish I could be his age, but I’m not. The reality is for me, it was imposing on me a lot of travel all the time, because the development is not happening in The Bahamas. It’s happening with The Bahamas, but the clientele is outside.

“And I’m probably a people person more than David is. He’s a deal maker. We need a deal maker…”

He added that in the last three weeks, he has started to see things differently within the company, because he is seeing things with a “fresh eye”.

“I think it’s going to be very successful. Honestly, it’s going to be really what we should have done before, but it’s good timing to do it now, because before I would not have seen. Today I can see,” Chalopin said.

“What is management? Management is putting the right strength at the right place. Because of historic growth and the way we were, we had a lot of strengths not at the right place, and we are trying to reorganize the strengths and put them at the right place. Sometimes the right place was outside, because it wasn’t making sense inside. Sometimes it was to restructure inside the company.

“It’s not finished. We are going through it right now. I think it will not be finished before June, probably, but we know what we want to do and we are doing well. And we are working on a number of things, acquisitions, development of new avenues of business, new countries outreach and that’s a lot of travel. And we need to do it.