The steps banks are taking to gear up for digitalisation and the support that is being made available to smaller-scale businesses operating in the non-oil economy were among the topics explored by Nigel M. Baptiste, president and CEO of Republic Financial Holdings Limited, in a wide-ranging interview he gave to Oxford Business Group’s online broadcasting channel, Global Platform.
In the interview, which is now available to view in full at https://oxfordbusinessgroup.com/video/nigel-m-baptiste-president-and-ceo-republic-financial-holdings, Baptiste highlighted the healthy liquidity levels of the country’s banks.
“Trinidad and Tobago banks probably have the highest capital ratios in the Caribbean. We average around a 23.4 per cent capital adequacy, which is five percentage points greater than any of the other banks in the other Caribbean territories.”
Baptiste acknowledged, however, that the National Investment Fund fixed-income bond sale, organised by the Ministry of Finance and aimed at raising $4billion for the government, would weigh on liquidity levels in 2018 and beyond, although he also pointed out that the money would return to the local financial system in time. The bond, which includes stocks in Republic Financial Holdings Limited, alongside other government assets, was oversubscribed when launched in July, with packages offered in a choice of five-year, 12-year and 20-year options.
Baptiste also told Global Platform that the company was channelling considerable resources into digitalisation, adding that the development of high-tech services would serve as a win-win for both customers and lenders.
“The banking sector in Trinidad, in particular, is investing very heavily in new technology, whether it be robotics or blockchain technology, to see how we can enhance the options that are available to our clients,” he said. “The sector does not view it as competition, but as an enhancement for society, because it will also help us to reduce the costs of many transactions that we currently engage in.”
He added, however, that while cashless services had many benefits, including speed and low costs, they also presented risks which could not be overlooked.
Turning to another topical issue, Baptiste said that with e-commerce undoubtedly set to revolutionise business practices in the future, banks needed to become active participants in the new way of working or risk being sidelined.
He said that like other lenders in the country, the company had opted to focus on supporting local enterprises with e-services, since the broader public was already well catered for.
“People are able to open their own e-wallets and do their transactions without the involvement of banks, so we are trying to facilitate e-commerce with local businesses,” he said. “Every commercial bank in the Caribbean is developing an e-commerce platform that its respective clients can utilise.”
Local businesses operating across the economy, many of which are small and medium-sized enterprises who support the country’s primary oil and gas producers, have also been on the receiving end of most of the loans made available by the banks, according to Baptiste.
“If you look at the distribution of those loans, you will see that they are actually evenly distributed across various sectors,” he said
Marc-André de Blois, OBG’s director of PR and Video Content, said that OBG’s interview with Baptiste was timely, given the key role earmarked for banks in the national drive to diversify the economy.
“Business confidence is on the rise in Trinidad and Tobago, buoyed by signs of recovery, which, while supported by higher oil prices, also suggest that reforms are gaining traction,” he said.
“With more still to be done in targeted sectors designated as ripe for growth, our interview provides a fascinating snapshot of the country’s changing economic landscape and the part that the financial services industry is playing in driving those changes forward.”