With the majority of Anguillians embracing their only indigenous bank, the National Commercial Bank of Anguilla, with long lines extending to the door at times, the Chief Executive Officer, Mr. Michael Bird, says it is doing exceptionally well and is here to stay. That is a substantial part of the message he conveyed to the people of the island while responding to an interview by The Anguillian newspaper on Tuesday, February 26.
Well poised and confident, Mr. Bird said: “We are here to stay and to serve the community. Our committed employees understand that at the end of the day the customers pay their salaries. That’s the key thing. Once we all understand that, it makes life a lot easier, but the key thing is that we are here to stay. We will put that ‘Here to Stay’ as one of our tag lines going forward.”
The interview began with Mr. Bird being asked about the position of the bank at this point in time. “Towards the end of April it will be three years since we were here,” he replied. “A lot of people said we wouldn’t exist for six months, twelve months, eighteen months, yet we are sitting now at three years. We have a solid part in the overall community. We have the majority market share of the banking business in Anguilla and the bank continues to grow each month. Over the last year our deposit base has grown significantly. We have surplus liquidity which is good, and from a customer perspective it is great news.
Surplus Liquidity For Investment/Lending
“Financially, we take a very prudent position in investing the depositors’ money because we always have to remember that the money belongs to the depositors and not the bank. We now have to invest that surplus liquidity, and are charged with investing it very prudently. Quite frankly, it is very difficult to find prudent investment and as safe as you can get it. We try to invest in EC dollars with some of the regional Governments, but we have very stringent criteria before we buy Treasury Bills with the depositors’ money.
“We have an investment house that helps us to invest in US dollars to get a return because, at the end of the day, we have to pay the depositors – in the case of EC dollars saving accounts – two percent. So we have to always try to either invest the money at more than two percent, or the preferable route is to lend it out. We are clearly trying to find good lending opportunities because we don’t want to end up with a lot of unpaid loans back in our books. That’s the difficult part: to take these deposits, convert them into prudent lending that can be repaid, and then pay back our depositors.
New Business & Customer Service
“We have made huge strides over the last three years and, as I said, we have a great staff helping us to meet, as best as we can, the customer experience we need. Some days, like any business, we have people who are out sick and, like this morning, the teller lines were like out to the door because we had two tellers absent which impacted everybody. We have just hired two new tellers to absorb some of the fair bit of new business from the closure of CIBC. This is good news for us and we appreciate all the new customers who came from CIBC – and those who came back to us.
“The lines are incredibly long and everybody demonstrates a lot of patience waiting for his or her turn to open accounts. We appreciate that and hopefully, as we go forward, we can improve the level of our customer service. That is one of the key things that banks have to offer because, by and large, every bank offers the same type of product. Interest rates can be slightly different, but it is all about the human touch and trying to satisfy the customer. That is what we are trying, and trying, to do so, hopefully, each day we will get a little better at it – but we are making progress.”
Financial Statements
The NCBA Chief Executive Officer continued: “One of the things you hear on the street a lot is the whole issue of the bank not providing financial statements. Yes, true. But there is good reason. I have heard that the Government, our shareholder, is holding back these statements. Rubbish. That is totally untrue. We have our auditors, Deloite & Touche out of Barbados – and they have most of the audit work done. We are just waiting for the final part of the Resolution [of the banking issue] to be completed. What that entails is that when the bank was originally created and opened for business in April 2016, all the deposits came over to us, and the objective was to add assets to balance the Balance Sheet. You get what is called the good loan portfolio, but it was found, at the time, that there were insufficient good assets to balance the deposit liabilities – so we are going to take on some non-performing loans from the Receivership to bring them back into the bank, and we are right now going through that process. We hope to have that done sometime in March.
“Once that is done, we will have a Balance Sheet; our auditors will come in to complete their audit; and then we will issue the statements. One of the things, too, we have to try to manage, as best as we can, is the level of provisions that we had to take against these non-performing loans and to bring that level as low as possible. We are trying, in the first set of statements, to clean things up as best as we can and then it will be easier to go forward. So, I think we are getting in good shape for moving ahead.”
Mr. Bird was delighted to report that in August or September last year, the Government of Anguilla, the sole shareholder of NCBA, had “injected twenty-two million US dollars to capitalize the bank, allowing us to operate as a true bank with liquidity.”
Corresponding Banking
He touched on a much-talked about matter as follows: “Another important thing is the whole issue of corresponding banking. We have some regional corresponding banks but the real key ones are those in Europe through which we channel all of our business – whether into Europe, Asia or the United States. One of the things disadvantaging us, as an institution, is that when you are dealing with Europe, by 9.30 or 10 o’clock they are shutting down – so when customers [of NCBA] do a wire transfer at 10 o’clock, it is going to go out the next day. If they came in earlier, the chance of getting into the United States the same day is very good.
“We are working with one of the corresponding banks in London to extend that timeframe. It doesn’t only affect us. There are several banks in the region that use them so we are all affected by the restriction of the time zones in Europe to allow a same-day delivery. I think we are getting close to having them extend their hours of business. That would definitely help us to be a lot more competitive.
“We continue to work to get an actual US corresponding bank. We have actually hired, along with about five other regional banks, a person in the US to source a corresponding bank but, at the end of the day, we are all so small – and the cost for a US bank to do corresponding banking with us is large, and does not give them sufficient profit so it is difficult. We are in discussions with one right now and, hopefully, it will come to fruition over the next month or two. If that happens, we are a hundred percent back in the business including the clearing of US cheques.
“I think if we can resolve the corresponding banking issue we will be on an even footing with everybody; but, nonetheless, using Crown Agents out of London, if the transaction is done early, it will get into the United States the same day but most of the time I think we are on a reasonably good footing, but getting a US corresponding bank would really help us.” In addition to Crown Agents, Mr. Bird disclosed that NCBA’s other UK/Europe/Asia/US corresponding bank is the Royal Bank of Scotland (NatWest). “We use Crown Agents more on the US dollar side and we use NatWest more on the Euro and Sterling side,” he explained.
Extension of NCBA’S Bridge Bank Status
Asked about the coming end of the three years during which the Government of Anguilla undertook to own NCBA as its only shareholder, Mr. Bird stated that he was not in a position to comment on what steps the Government, preferably called the shareholder, would take thereafter – whether or not to divest. He, however, stated the following:
“The bank was created under what is called ‘a bridge bank’ status which had a life of three years. The Monetary Council [of the Eastern Caribbean Central Bank], I think it was last year, decided and agreed that bridge bank statuses would not be for three years, but five years. So any bank that has a bridge bank status would be for a maximum term of five years. The Monetary Council has drafted legislation that is being passed throughout the OECS and, at some point it, will be done here in Anguilla as well. So that’s a positive.”
Conclusion
The interview with Mr. Bird ended, as it begun and progressed, with an assurance to the people of Anguilla that their own bank, NCBA, is here to stay; that having surplus liquidity, for investing, it is in a position to offer good lending opportunities to persons who will repay their loans; that it is prudent with safeguarding depositors’ money; that it is working towards having essential corresponding banks; that its great staff pays full attention to customer service and satisfaction; that it has made significant progress over the three years of its establishment; that it is doing exceptionally well; and, to repeat, it is here to stay.
