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Unprofitable operations forced banks off sister islands—Premier

-unable to say when banking services will return
“The Government is currently in discussions with other institutions to determine their interest in filling the void that has been created by the recent announcement by Scotia Bank that it will be terminating its operations in Virgin Gorda.” Photo: VINO/File
The reasons behind the banking institutions closing their doors on the sister island of Virgin Gorda, was disclosed when Leader of the Opposition, the Honourable Andrew A. Fahie (R1), pressed Premier and Minister of Finance, Dr the Honourable D. Orlando Smith (AL) on the state of banking services in the VI, during a sitting of the House of Assembly. Photo: VINO/File
The reasons behind the banking institutions closing their doors on the sister island of Virgin Gorda, was disclosed when Leader of the Opposition, the Honourable Andrew A. Fahie (R1), pressed Premier and Minister of Finance, Dr the Honourable D. Orlando Smith (AL) on the state of banking services in the VI, during a sitting of the House of Assembly. Photo: VINO/File
Premier and Minister of Finance, Dr the Honourable D. Orlando Smith (AL) said, “the banks that previously operated on Virgin Gorda, all reported that the Virgin Gorda operations were not profitable and therefore could no longer be sustained.” Photo:VINO/File
Premier and Minister of Finance, Dr the Honourable D. Orlando Smith (AL) said, “the banks that previously operated on Virgin Gorda, all reported that the Virgin Gorda operations were not profitable and therefore could no longer be sustained.” Photo:VINO/File
ROAD TOWN, Tortola, VI - Several banks which operated on Virgin Gorda in the Virgin Islands (VI), were all forced out of operations as a result of ‘unprofitability and a lack of sustainability’ and the current National Democratic Party (NDP), government is still unable to say when the services will return to any of the sister islands.

As a result, the Government is now is examining the use of cashless transactions in addition to attempts at attracting new banks to the Territory to replace those that closed operations on the sister islands including First Bank, First Caribbean International Bank and Scotia Bank

 Recurring Issue   

The reasons behind the banking institutions closing their doors on the sister island of Virgin Gorda, was disclosed when Leader of the Opposition, the Honourable Andrew A. Fahie (R1), pressed Premier and Minister of Finance, Dr the Honourable D. Orlando Smith (AL) on the state of banking services in the VI, during a sitting of the House of Assembly (HoA) on July 24, 2018.

Hon Fahie requested the Premier, “…inform this Honourable House, why the different banking institutions that physically operated in Virgin Gorda left, or are in the process of leaving and how the government intends to address this recurring issue.”

In response, the Premier said, “the banks that previously operated on Virgin Gorda, all reported that the Virgin Gorda operations were not profitable and therefore could no longer be sustained.”

Cashless

He further disclosed that “the Government is currently in discussions with other institutions to determine their interest in filling the void that has been created by the recent announcement by Scotia Bank that it will be terminating its operations in Virgin Gorda.”

He was unable to say however, whether any of the banks, would be returning to the island, or when, instead offering the platitude, that “the reality is that the decision of any enterprise, bank or otherwise, as to where it will locate or operate from is purely a business decision based on commercial realities.”

Pressed further by the Opposition Leader on Government’s plans to address the banking needs of residents on Anegada and Jost van Dyke, Dr Smith revealed that “in addition to discussions with existing institutions, my Government is considering other options such as the provision of cashless money services.”

He did not offer any further details.

Scotia Bank, which is the only remaining banking institution on Virgin Gorda—the second highest most populated sister island—is scheduled to cease operations by September 1, 2018, leaving residents without any banking services.

Many critics of the Government have said they continue to drop the ball on their treatment of the sister islands.

 

 

 

9 Responses to “Unprofitable operations forced banks off sister islands—Premier ”

  • Is that so? (01/08/2018, 12:53) Like (17) Dislike (1) Reply
    Unprofitable operations suggest ineffective management. What exactly does unprofitable mean? That the bank made less than it's projected profit? Could that not have been made up by relocating away from pricey BVI Investors Club owned property? If they actually lost money, they would have said so. At the end of the day, this is symptomatic of corporate bank mentality. They can't make enough money from smaller communities to pay their executives millions, so they're not interested in serving them, even if it means leaving them high and dry.
    • True (01/08/2018, 13:46) Like (5) Dislike (1) Reply
      the reason they moved/mpving is due to high rent that was free for so long due to the guy who built the units owned Scotia the money so rent was free, now it is not, simple.
  • ccc (01/08/2018, 16:51) Like (6) Dislike (0) Reply
    we can't wait to send home bertee, funny man the vote for burtee and vote for you will not work this time
  • Hmm (01/08/2018, 21:44) Like (3) Dislike (0) Reply
    Blame BVI investment club rent to high but the NDP will cover that up they all link they all in the investment club together so its a lost
  • E. Leonard (02/08/2018, 00:08) Like (2) Dislike (0) Reply
    Tortola is the largest island in the VI/BVI chain; Road Town, its capital city, is the banking centre of the territory; all banks doing business in the VI is headquartered in Road Town. Nonetheless, the sister islands, ie, Anegada, Virgin Gorda, Jost Van Dyke........etc need at least basic banking services. They need more than digital and mobile banking services; they need a functional brick and mortar facility. The challenge is how to profitably provide banking services with a physical facility. Retail banks make money by loaning out customers deposits with interest, and charging a variety of fees.

    I’m assuming that the bank headquarters, along with branches, must be self supporting from interest on loans and fees. Nevertheless, banks are in operations in the BVI so they must be turning at least the minimum projected profit margin. As such, is the overall profit margin of the bank(s) sufficient to supplement banking operations on the sister islands yet turn a reasonable profit? This (supplementing) would demonstrate positive and amicable corporate social responsibility(CSR). Undoubtedly, the banks give back to the community; supplementing operations in the sister islands would increased its give back to the community, increasing their CSR. Moreover, what is the major contributing factor(s) to the unprofitably, ie, low or declining loans, high overhead, ie, rent.....etc? Can government use taxpayer funds to incentivize banking services on the sister islands?
  • Prophet (02/08/2018, 08:23) Like (0) Dislike (0) Reply
    How can a bank like 'S' be profitable when they chase out customers based on some kind of profiling or
    'pedigree' chart? 'S' for example, went from ridiculous to insane. So those who didn't measure up to
    their 'high' standards merely took their banking business elsewhere.
  • VG (02/08/2018, 12:56) Like (0) Dislike (0) Reply
    This is a poor excuse. Scotia has refused persons trying to open accounts including established businesses. They stopped giving home mortages years ago in the BVI. They STPOPPED giving loans for tourism based businesses also. How can they expect to make a profit???
  • baffled (02/08/2018, 13:02) Like (1) Dislike (0) Reply
    So Dr. Smith you are saying that you knew from the time First Bank closed the reason why then First Caribbean and you wait until Scotia getting ready to close to say this when you knew years ago and DID ABSOLUTELY NOTHING!!! SHAME ON YOU AND YOUR COLLEAGUES
  • Observer (02/08/2018, 14:52) Like (1) Dislike (1) Reply
    How come BVI Electricity Corporation does not have an office on Virgin Gorda? This needs to be looked into. It is unfair to the residents on the sister islands.


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