Scotia is here to stay

Published: Wednesday July 2, 2008

The emergency sale of investment bank, Bear and Stearns, the unforgettable crash of Enron, the US credit crunch and a possible global recession all spell bad news for the global economy.

And at home the problems facing businesses are inflation, crime and labour shortages. However, in the midst of it all local banks have been reporting record profits this year and even the multi-nationals are growing more comfortable on local soil. One such bank is Scotiabank.

Speaking with the Business Express during the Caribbean Investment Forum in June at the Hyatt Regency Hotel in Port of Spain, Scotia's (international) executive vice president and chief financial officer Luc Vanneste said business was extremely good for Scotia throughout the Caribbean.

He said he believes it will stay that way for some time to come. While he acknowledged that the world's financial system is seeing turmoil and the Caribbean region needs to look at how this is affecting the region's economy, he believes the bank which has been in the area for several decades has no reason to fear.

He said, "A bank is not about the bad times and good times."

The banker explained that the institution should embrace the country and community for the long-term if it is to be successful.

He said that over the years Scotia has built a strong relationship with its customers in Trinidad and Tobago and many see it as a stalwart within the local economy.

While Scotia may be important to the Caribbean people, the Caribbean is also important to the Canadian bank, as international business accounts for more than 30 per cent of Scotia's consolidated income, said Vanneste.

Though he said Scotia did not make any major changes as a result of credit crunch in mainland America, he admitted the bank which has an asset base of over Canadian $450 billion is now more careful about their loans portfolio and looks at their risk management structures rigorously, to assess any potential problems.

Despite a global economy that is turning sour and a somber mood throughout the investment world, Vanneste said Scotia continues to expand and set up branches particularly in the far east. "Our most recent acquisition being in Thailand," he told Business Express.

Though the Central Bank of Trinidad and Tobago has been increasing the repo rate, and therefore interest rates at banks also have been increasing, Vanneste said while interest rates do impact upon a customer's ability to repay his loan, he believes people are aware of what they can afford and therefore will not bite off a bigger loan than they can chew.

The head Scotia executive also said Scotia's business in Trinidad and Tobago can only do better as the national financial regulation improvement drive by the Ministry of Finance, the Central Bank and the Securities and Exchange Commission gets underway.

He said the upgrading of the regulatory system and the proposed cooperation of the stock exchange markets in the Caribbean will only serve to the benefit of businesses which have set up shop in the region. "We live in a world where businesses are always expanding and there is greater need for cross border cooperation if one is to succeed," he added.

While he did not say whether Scotia was planning any expansions in the region or more specifically any new branches in Trinidad and Tobago, he did say he was in talks with Scotia Trinidad and Tobago managing director Richard Young so the company can be fully prepared for any new opportunities which it may run into.


Source: Trinidad Express Newspapers
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161346701