Republic banking on Barbados
By Geralyn Edward, Business Editor | Mon, October 15, 2012 - 10:00 AM
DESPITE a significant drop in profits between 2010 and last year, former state-owned Republic Bank (Barbados) Ltd remains the second-largest business unit within the Republic Bank group.
This was revealed by Derwin Howell, managing director and chief executive officer of the local operations.
Howell, who will return to Trinidad and Tobago in two months as second in command of group operations, told BARBADOS BUSINESS AUTHORITY in an exclusive interview that the former BNB remained an important player for the regional banking giant.
In 2010 Republic Bank (Barbados) recorded $36.03 million in after-tax profits; however, that fell to $15.12 million last year as the island continued to struggle with weak loan demand and anaemic economic activity.
Despite this, Howell said, the island’s banking operations were regarded as “an important part of the group’s profitability and success”.
According to the career banker and engineer, “We think that there is potential here and we would certainly continue to place some reliance on Barbados’ moving forward.
“We see the challenges that the economy faces. We understand because we track these things. We
operate here, [in] Trinidad and Tobago, Guyana and Grenada, and we know the environments.”
The senior banker said the group’s operations in Grenada were also facing challenges in a significantly slowed economy.
Last financial year, Republic Bank’s return on average assets fell to 0.66 per cent from 1.54 per cent in 2010, highlighting the challenges in the local banking environment.
Howell noted that the bank was able to improve some of its key numbers in the 2012 financial year to September but due to the current blackout period, he could not reveal details before the financials were released to shareholders.
“At the end of the day, we will get what we put into it and we will continue to invest in our people and their training,” he said.
And almost two months after its rebranding from Barbados National Bank to Republic Bank of Barbados, he disclosed, “We are beginning to see a lot of our customers in Trinidad and Tobago who operate in Barbados coming over and we [benefit from] that extension of business across the region.”
Regarding the impact of the current conditions on the bank’s staffing levels, which hover around 500, Howell said every effort was being made to retain jobs in the institution.
The message, he said, had gone out to employees of the need to improve productivity rather than achieve better profit margins by reducing employee numbers.
“I don’t want to reduce staff but I want to increase revenue and grow the bank,” he told BARBADOS BUSINESS AUTHORITY.
“That message has gone out and I have seen a pickup. Any reduction in staff has come from attrition; we have not gone out and cut staff.
“That is the approach we prefer to take. We are not unmindful of what is going on in the economy. Everybody knows that when you put someone on the breadline, it is another person out there and that is not an approach we want to take.
“We would like to grow our business to allow us to keep all our staff,” he pointed out.
Howell noted that staff numbers could contract by about six per cent annually through resignations and retirements, and assessments are made on whether the company needed to hire replacements.
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