Keeping homes off the block

NEITHER Royal Bank of Canada (RBC) nor RBTT Barbados has attempted to sell a single property of its defaulting clients over the past two years, says Horace Cobham, president and country head of the two institutions.
In a wide-ranging interview with BARBADOS BUSINESS AUTHORITY, Cobham said the difficult economic circumstances faced by clients had affected the business.
“We’ve had mortgage holders or just simply retail clients who have not been able to maintain on a consistent basis their debt service payments.
“A loan may have been granted on the basis of two incomes and that family unit has found itself with one income, or you may have found that individuals may be earning less because they are on shorter work weeks,” he said.
The top banker noted that in some cases, a family member had become ill and unable to work or might simply have been laid off.
However, he said RBC, which purchased RBTT in 2009, was working closely with corporate and personal clients to help them manage during these difficult times.
When asked about loan delinquency, Cobham said: “I would prefer not to give a figure. What I would say . . . is that [while] our delinquencies have increased, they are still significantly lower than the industry [average] but they are much higher than we have historically seen in any category.
“That is cause for concern, but it is not cause to lose faith,” he insisted.
He said while loan growth had not declined, it had not kept pace with historical growth rates.
“Once revenue growth has slowed, one thing that doesn’t slow as quickly is expense growth. So the impact is seen in the bottom line in terms of lower profitability,” he said.
Cobham: “We spend a lot more time with our clients who have had difficulty in meeting their requirements.
“We try to understand the challenges they face. In many cases we’ve rewritten their obligations to assist them in being able to stay current.”
This year, RBC is celebrating 100 years of operation in Barbados. Headquartered in Canada, it has 77 000 employees who serve more than 18 million clients in 55 countries.