Ties between the Grenada Co-operative Bank Limited (GCBL) and the 1st National Bank of St Lucia Limited have been deepened following the signing of a Memorandum of Understanding (MOU) to facilitate greater financial profitability.
The aim of the MOU, which was signed on December 28, 2015, is to govern a functional co-operation relationship between the two indigenous Banks.
This relationship between the two financial institutions started 80 years ago, when the founding fathers of GCBL, which was established in 1932, travelled to St Lucia in 1937 to establish the St Lucia Co-operative Bank, which was rebranded in 2004 as the 1st National Bank of St Lucia Limited.
Speaking at a joint press conference involving the two banks last Thursday at GCBL, Chairman of the Board of Directors of Grenada Co-op, Derick Steele told reporters that over the past 80 years, both banks have grown in strength with commendable market share, profitability, and prestige.
“This journey is building on the relationship that started almost 80 years ago with the deep-set knowledge and the aspiration that we can be world class when the raw ingredients are indigenous”, he said.
“This is a journey and an aspiration that commenced long before the birth of the OECS as an organised body of countries. Ours is a vision that moves quickly in the midst of regulatory changes such as the Banking Act to ensure that customers are well served and that shareholders returns remain consistent,” he added.
Chairman of the St. Lucia bank, Charmaine Gardner said prosperity is the ultimate objectives of the two financial institutions.
“This collaboration does not merely seek to survive economic and financial crises; it seeks to emerge and ensure a stronger and more resilient entity,” she remarked.
Under the programme, three projects will be undertaken; namely, improving branches business model, the design and implementation of a new credit operating model and the promotion of IT capabilities.
The projects are designed to boost growth, share costs, drive profitability, and improve efficiency.
Resident Representative of the ECCB, Linda Felix-Berkeley who also appeared at the press conference, stated that the collaboration between the two indigenous banks fits into the ECCB’s encouragement of consolidation and skills maximisation in the financial sector and wished other banks would adopt it.
“If replicated by other banks or other banks are included throughout the region, it can result in the long term transformation of (our) financial landscape and turn the sector into a stronger, more efficient, profitable sector that would be able to weather the challenges faced in the sector; the latest as we are aware being the concern over corresponding banking services,” Berkeley said.
Also speaking at the function was Minister for Economic Development, Oliver Joseph who expressed the hope that the collaboration will encourage a reduction in banking fees.
“We need to find ways to reduce banking fees and also to be more transparent to the fees that are being charged. The public is asking for it and we need to respond. To the extent that this collaboration can result in lower fees or an account of lower cost will undoubtedly stress the public’s confidence in the banking system,” Minister Joseph said.
In highlighting the benefits that will be derived from the collaboration, Managing Director of GCBL, Richard Duncan said greater value will come to shareholders and customers.
“In fact, you may see a stabilization in fees before you see a reduction. The reality is that banking fees are going nowhere, like disappearing. So the rate of increase obviously…we don’t want to unnecessarily delude people into believing that through functional cooperation banking fees will vanish”, he said.
“…The whole question of being able to better match customer needs with the products that we have and also find opportunities to create new products to meet emerging customers’ needs. Then these things require serious investment and by collaborating we believe we (are) going to do a good job in that area as well”, he added.