Apr 2015 Financial News

CEO CONFIDENT IN ECONOMY (Barbados)

Apr 23, 2015

A leading commercial banker is quite upbeat about the future performance of the Barbados economy, which in the first quarter of this year registered growth of almost one per cent.

He is Rik Parkhill, CEO of CIBC FirstCaribbean International Bank (FCIB), who said that the Barbados economy is improving while at the same time pointing to an increase in loan demands by the private sector.

“What we are seeing as a financial institution is a pick-up in private sector investments,” Mr. Parkhill told newsmen following a Media Engagement Luncheon he and members of his Senior Executive Team hosted at Bellevue House in Station Hill, St. Michael.

The CIBC FCIB official said that projects which were in the pipeline for the past five years are dusted off. “I think that the level of private sector investments as it ramps up is going to propel the Barbados economy,” he said.

Mr. Parkhill noted the new demand for loans was coming from the private sector, whether it be for hotels, or the expansion of a hospitality business, or even infrastructure projects.

“So I am modestly optimistic about this year and certainly more optimistic about the future than I had been over the last couple of years,” he said, noting that as a financial institution the bank is also confident about the longer term prospects for the Barbados economy.

He commented that while the economy was in the doldrums for some time, “it has started to bounce back and you are starting to see that in our financial results as well”.

In fielding a wide range of questions, Mr. Parkhill also touched on the recent announcement by the Central Bank of Barbados that it will no longer be setting the minimum savings rate, something that will now be done by commercial banks and finance houses. The measure became effective two days ago.

The top Banker agreed that the decision by the Central Bank of Barbados is a good move. He said that Barbados and the OECS (Organisation of Eastern Caribbean States) were the only countries in the Caribbean that maintained minimum savings rates. Barbados has eliminated theirs completely while the Eastern Caribbean Central Bank (ECCB) has dropped their minimum savings rate as well.

“I think you will see a corresponding drop in lending rates as well and will help the Bank in allocating its liquidity and I think it will help the performance of the economy as well,” the CIBC First Caribbean Bank official stated.

While not stating an amount by how much the minimum savings rate will be lowered, Mr. Parkhill pointed out that since the market will eventually sort that out he is not going to specify a percentage decline.

According to him, “One of the reasons why lending rates have been higher than they should have given the backdrop of the economic performance, was the minimum savings rate.”

Parkhill said CIBC First Caribbean International Bank has given their customers 30 days notice of the pending change to the minimum savings rate. “We will take a look at it closer to mid May and come to a decision about the supply and demand of savings and what the rate should be,” he further remarked.

Source:
Barbados Advocate
Thrusday April 23, 2015

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=42986