WHEN WE OWNED The Mutual Bank from 1993 to 2004 the concept at that time was to have a different approach to banking using technologies.
We actually introduced supermarket banking in Barbados. We looked at movement across the region to mirror some of our insurance portfolios but what we found was that the region was over banked and the cost of setting up a new institution didn’t justify it at that point and we said ‘okay, let us step back and wait to see when the consolidation in the banking industry will occur’ and our view is that will happen very soon.
We have taken a strategic decision in Jamaica because an opportunity existed there and we will continue to look and monitor what’s happening across the region in terms of consolidation in relation to the banking space, because it has happened in the insurance space and we will make a decision at that point.
I think that it is going to be in all of the islands, to be quite honest, just like in the insurance industry and I think rather than us having lots of small banks there will be a few large institutions.
Who will be the institution to pull the trigger? I am not in a position to say at this point.
We have seen what’s happening in Jamaica but that hasn’t actually gone into the other jurisdictions as yet but we are positioning ourselves to be a strategic player in the financial services industry and if opportunities come up we will certainly have to look at them.
We do have a lot of small banks in the [Organisation of Eastern Caribbean States], for example, they need to be restructured and it could very well be that that’s the starting point.
What you are seeing is a restructuring of costs, and that’s how I look at it in the first instance.
When economies are not performing at the same optimal level relative growth not strong, it is natural for institutions to start to trim costs and so the restructuring that you are seeing may very well be addressing that aspect of it.
The second aspect of it is if this is going to be a new trend in terms of the performance of the economy, what is now a restructuring of costs may very well be a restructuring in operations going forward.
The third piece is that sometimes when you are in the right position, when the economies are not doing well and assets are not being sold at their premium value, that’s the time [for new investors] to start.
Opportunities provide funding so if it is a significant opportunity that we believe is [beneficial] to our shareholders we believe that the funding would be available.
I don’t think that you can say that we have pockets of money sitting down waiting on that but if the opportunity is significant and it makes sense for us in the region I am sure the money would become available.
(Dodridge Miller made these comments at a recent video conference in the context of Sagicor’s purchase of Royal Bank of Canada’s Jamaica operation)
