Prime Minister Addresses Issues In Banking Sector

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Updated: August 10, 2015

About one week ago it was brought to the attention of the general public that CIBC First Caribbean International Bank would be closing its doors in Belize and that negotiations are currently underway to have the bank’s assets sold to Heritage Bank.  It was indeed a major revelation as dozens of men and women stand to lose their jobs…. But aside from that concern, it also has created some worries that perhaps the move goes deeper than that and that it could be a reflection on Belize’s economy.  Yesterday, the media met up at the Philip Goldson International Airport with the intent of asking the Prime Minister to weigh in on this issue.  According to Prime Minister Dean Barrow, while Heritage Bank would not be able to absorb all the employees who will be left unemployed, he is confident that they would be able to find a place in the financial sector.

DEAN BARROW

“They say that this is a business decision, clearly they had ceased being as profitable as they used to be and no doubt there are several reasons for that. It’s unfortunate that they are leaving I am happy that Heritage Bank is purchasing their assets and will … when both parties had come to see me both Heritage and First Caribbean, I was assured that certainly the vast majority of the First Caribbean staff will be absorbed by Heritage they did not say every last single individual but the vast majority will be absorbed by Heritage. Clearly all of the employees of First Caribbean will have to be paid their severance and get their full benefits, for those who will be employed by Heritage it’s the start of a new chapter. The others who are not going to be absorbed I hope and believe that they will be able to find jobs in the banking sector, in the financial sector of the country so we thank First Caribbean for the years during which they did business there, regret that they have to go but express some degree of relief that their departure is not as disruptive as it might have been.” 

Another issue arising in the banking and financial sector is the news of the Bank of America cutting ties with Atlantic International Bank.  July 30, 2015 was the last day of the working relationship between Atlantic Bank International and Bank of America, as wire transfers were no longer being accepted nor US Dollar Bank Drafts.  According to the Prime Minister, it is an undertaking being done by the large financial institutions in the United States and Europe and is known as de-risking.

DEAN BARROW

“We’ve explained this over and over, it is unfortunate but the international banks are in fact as we said to you de-risking, that is the term that’s used in the sector and its happening to small jurisdictions all over the place. Again with the termination of the relationship with respect to Atlantic it is only on the international banking side. So the domestic banks certainly as of now is not affected. Apart from de-risking I’ve said for some time now that the large jurisdictions are determined to destroy the off shore sector in small countries such as Belize. They say that it is harmful tax competition that it gives their nationals to put their monies in jurisdictions like Belize and avoid paying taxes to them, that one is inevitable I think that there is a great deal of hypocrisy on the part of the big countries but I have made up my mind that that is inevitable so I am far more concerned about the domestic banks and when they have their corresponding banking relationships terminated. Thankfully up until this point in time it is only the Belize Bank on the domestic side that has had that termination so I will continue to hope that it is contained, that it would go beyond the Belize Bank on the domestic side.”

It is uncertain as to when the last day of operations will be for the CIBC First Caribbean International Bank but Love News understands that the business discussions are still ongoing between CIBC and Heritage Bank.  At the finalization of the business between both banks, all accounts with First Caribbean Bank will be moved over to Heritage Bank.