RBC executive: Bank making ‘hard choices’
Corruption, poor fiscal responsibility, outdated and detrimental mortgage and lending laws, and inadequate education and training regimes in The Bahamas have had adverse consequences for the banking industry, according to Tim Rider, Royal Bank of Canada’s (RBC) senior vice president for sales in the bank’s Caribbean arm.
Rider, who was the lunchtime speaker at Royal Fidelity’s Bahamas Economic Outlook (BEO) yesterday, said RBC has been making “hard choices” with regard to its local operations in order to survive the “revolution that we are witnessing in banking and other industries”.
RBC has been suffering growing pains and customer frustration as it moves to a mostly digital platform. It announced the consolidation of several branches recently and its subsequent need to cut staff.
Rider said while Bahamians have been asking banks to slow down their digital rollouts, given the speed at which the world is changing, the “current situation means we cannot be slowing down and need to be speeding up”.
Rider suggested that inadequate fiscal controls and the country’s substandard education both pose the biggest threats to the local economy, adding that corruption is a paramount issue The Bahamas has to focus on.
He asked, “Should RBC be committed to The Bahamas if The Bahamas is not committed to its own success?”
Rider reiterated the company’s commitment to The Bahamas, stressing that RBC has been in this jurisdiction for 110 years, but he warned: “Without the implementation of changes that will bring The Bahamas to world-class levels, The Bahamas will continue to fall behind, and its people will suffer the consequences.”
He said he has personally witnessed wealthy people and companies limiting their investments in this country and setting up financial escape routes for their families in the event that The Bahamas’ economy does not show real signs of improvement.
“It is a detriment to the Bahamian economy,” he said.
Rider made a plea that the government revisit and adjust the country’s lending infrastructure, insisting that laws like the Homeowners Protection Act hurt banks, and an inadequate and outdated land registry system frustrates the already strained mortgage system. He said, given the global positioning systems and data systems on the market an updated and digitized land register system is in reach for The Bahamas.
He added that another vexing problem within the mortgage system lies with real property tax. Rider said if real property tax is not paid by a home owner the bank is forced to pay, and the loan is therefore automatically put into non-accrual status.
He asked, “Should the international banks be committed to The Bahamas’ mortgage market, given the current market structure for mortgages in this country?”
Rider said it is essential that The Bahamas fix its inadequate education and training systems for its citizens. He said the lack of education and U.S. dollar parity puts The Bahamas at a disadvantage, as it has an expensive, undereducated workforce.
He said RBC has often been hard-pressed to hire people with basic math skills and has had to turn to hiring college students to do even the most basic jobs.
He said RBC is committed to helping The Bahamas develop and educate the youth.
“We have to look at new ways to educate,” he said. “As a Canadian living in The Bahamas who runs RBC, I hope the people in this room will step up and demand and make the required changes.”