In fact, managing director of Barbados National Bank and executive member of the Barbados Bankers' Association Robert Le Hunte, said the profit margins
in Barbados were among the lowest when compared with Trinidad and Tobago and the Eastern Caribbean.

Le Hunte was responding recently to concerns expressed by Central Bank governor Dr Marion Williams that commercial banks in Barbados were not lowering lending rates to a point that reflected the reductions the Central Bank mandated for interest rates paid on savings accounts.

The BNB boss said his bank had consistently lowered its interest rates on loans on every occasion that the Central Bank dropped deposit rates. However, he added that residential and commercial mortgage rates required a different approach and needed to be analysed differently.

In a recent interview, Le Hunte said Barbados had one of the most competitive markets in the region, with bank profit margins around four per cent.

He said that among the Republic Bank group, Trinidad and Tobago had the highest margin of seven to eight per cent, while in the Eastern Caribbean it was between four and seven per cent.

"We are not making super profits in the banking sector in Barbados and we are facing a host of expenses also. We are carrying a lot of expenses and assets on our books," he told the DAILY NATION.

In making his case, Le Hunte said Barbadians had accumulated billions of dollars in deposits for which banks were required to pay consumers 4.50 per cent interest from April 1.

He added that, on top of that, borrowing had slowed and investment opportunities for banks such as Treasury bills had now proved unattractive because
of the low interest rate of just 4.50 per cent.

In recent weeks, commercial banks have faced increased criticism over their level of profits and calls by bankers for the Central Bank to stop regulating
the minimum interest rate they should pay savings accounts and allow them to set their own rates. (GE)