THE BIG INTERVIEW: Tighten the belt
David Noel was recently appointed managing director and chief executive officer of Scotiabank Barbados and the Eastern Caribbean.
An attorney at law, he moved to Barbados last December after serving the last five years with the bank in Canada. He spoke recently with News Editor Geralyn Edward during an interview at his Warrens, St Michael head office.
Q: What are some of the major changes in the financial services sector that you have noticed in recent years?
Noel: Two changes in the last five to ten years that have impacted how banks and financial institutions operate include the increased levels of regulations and increased compliance requirements – which are all good for the stability of the sector . . . . Those developments are forcing banks to take a closer look at how we do business and making sure that we know our customers well.
The other fact is that in the Caribbean we have open economies that are impacted by what happens in our larger trading partners such as North American or Europe. As financial institutions, you can only do as well over the long term as the economies in which you are operating.
Q: What is going to be your focus as the new Scotiabank boss?
Noel: There are two things you always have to focus on, one is your customers and making sure you are giving them practical advice and solutions and you are meeting their needs and the second is your people – making sure you invest in and train them because it is only through our people that we are going to be able to deliver to our customers.
Q: What’s your assessment of where we are in Barbados?
Noel: I have done some assessment and I am aware of the situation that we are in here. Barbados is going through a challenging time and that is no secret. The economy has been impacted by the global recession in our large trading partners of Europe, particularly the UK and the United States.
As the UK economy went into recession and had difficulty, consumer spending was down and that affected tourism and some of our foreign direct investment. It was a global phenomenon and so it was not easy to make up those losses in other areas and that has had an impact on our reserves and an impact of economic activity overall. The question now is what do we do about it?
My view is that you need, from a macro perspective, fiscal consolidation and certainly tightening your belt. I believe the initiatives announced by the Government are a clear indication that Government is taking action to correct the fiscal imbalance.
Q: What can a commercial bank really do for customers at this time?
Noel: At this point in time we owe it to our customers to provide advice and solutions and that means having a conversation with them and understanding their needs and aspirations and trying to find the means to get them there.
That does not mean that every customer that comes in that wants a loan is going to get the answer that they hope for but we have to do what’s right for our customers by giving them practical, sound advice, which could be that now is not the best time to take on more debt; maybe it is a time to consolidate and save.
Q: What about banks’ role in helping the private sector during this tough time?
Noel: We are cautiously optimistic about the medium-term prospects for Barbados and over the long term we expect Barbados will continue to do well.
These are challenging times and we are committed to working with our customers and to doing our part to grow the economy.
Q: Why do you think that you were chosen for this job?
Noel: Scotiabank has many talented people across the globe. We operate in 55 countries with 83 000 employees and service more than 20 million customers. We have a variety of employees who have worked in different markets and different areas.
I worked in Jamaica, Toronto, New Brunswick, and Prince Edward Island in Eastern Canada and so I have a different and wider perspective about the differences in markets and economies and I believe that would have contributed to the decision by the bank to entrust me with this franchise.
We have just created what is call an English Caribbean Regional Office and within it we have four clusters of countries that report up to individual heads and they are all Caribbean nationals.
Three of them like me went to the University of the West Indies. We know our markets, we know our people and we know our culture and so we understand the markets in which we are operating. That positions us to be able to manage in these difficult times.
Q: Are there any plans to restructure Scotiabank’s operations?
Noel: As any business we will always look at our staffing needs and how we allocate those resources but there is certainly no plan to have any material adjustments in our staffing. We have, for example, increased the number of officers focused on small business.
Q: What’s your view on the need to diversify our economy?
Noel: Everyone would like to be diversified and be involved in different industries but we also need to understand what your competitive advantage is and our competitive advantage as a region has a lot to do with our geography, climate, level of human capital and so we are ideally suited to be involved in tourism and offshore financial services.
I believe we should continue to invest in and support those sectors. But we are also open to a good business plan if the private sector brings something that is outside of those two traditional sectors we would be happy to look at it and go into those areas.
Q: The small business sector needs help but they are also risky investments, how can banks assist at this time?
Noel: Small businesses represent one of the areas that we are focusing on at this point. Small businesses can help drive an economy and we owe it to our customers and the private sector to be there to support the growth of small businesses.
That means we need to be willing to listen to our customers, really assess their needs, provide them with practical, honest advice about what we can provide for them. It may not always be what they want to hear but we have to do what we believe is in their best interest.
We are not going to be able to provide financing to anyone that says they are in a small business and they would like financing but we are certainly prepared to listen, listen objectively and openly.
Q: Tell us about your move back to Barbados and the changes that you have noticed?
Noel: I spent the last five years in Canada and it is good to be here in Barbados and be back in the Caribbean.
I grew up in the Caribbean and it feels like I am coming back home. I have a special connection to Barbados because I spent a few years here as a law student.
Whenever I comment to my friends that Barbados has really grown, they don’t see it until I start going back to when I first came here 20 years ago, there was nothing in [Warrens] except one car dealership and now when you look through the window you see what’s here.
The University of the West Indies used to be on one side of the road . . . now both sides of the road are fully developed and even expanding down the hill.
I remembered going to the cinema and the Globe was it with me. Now you have cinemas in Limegrove and other places.
I have seen the changes in many different areas; Barbados has seen tremendous development and it is mostly positive.
The structure is certainly going to make it easier for our customers who are regional customers and we going to be able to collaborate easily with partners across the region and focus on the region as a business as opposed to operating in little countries that report up to Toronto – we can now operate the business more effectively as a region and certainly more synergies to be had that way.