May 2009 Financial News

Banking on stability

May 21, 2009

RBTT Financial Group Chief Executive Officer, Suresh Sookoo, emphasised last week that the recent Royal Bank of Canada/RBTT merger had come at a time “when customers need, more than ever, to feel secure about the stability of their banking institutions.”

Sookoo, who was speaking at the opening of RBTT’s new Caribbean headquarters in St Clair, Port-of-Spain, cautioned: “We are living in uncertain times. Across the globe we are seeing countries moving from relative strength to structural weakness, and companies challenged by softening markets and persistent uncertainty.”

The RBTT Financial Group CEO in making reference to companies being challenged “by softening markets and persistent uncertainty” clearly preferred to be frank and his declaration of the commitment of RBTT to apply the best practices that have kept the Royal Bank of Canada as one of the most profitable banks in the world was distinctly reassuring.

RBC’s acquisition of RBTT on June 16, 2008, last year was a US$2.2 billion transaction and saw the creation of a regional financial institution with total assets of US$13.6 billion and embracing 18 Caribbean nations.

Although there was a dramatic slide in the price of crude on the international market by some US$100 a barrel last year, confidence in energy-based Trinidad and Tobago and its banking system remained relatively high.

Despite the economic downturn, a great deal of money was still being turned around within the country’s economy in 2008 and business with RBTT, a major pillar in the banking system, remained high as well.

In addition, over the past several years, RBTT, which merged with the Royal Bank of Canada (RBC) in June of 2008, had acquired a number of banks throughout the Caribbean. While a great deal of economic activity is personal and commercial banking, a substantial portion is conducted with the Governments in countries and territories in which it operates.

The floating of bonds by the TT Government other Governments in the region has tended to form a large part of the business conducted by financial institutions for Governments.

Meanwhile, a further reduction in the repo rate by the Central Bank of Trinidad and Tobago will allow RBC/RBTT, as part of the TT financial system to offer a yet lower interest rate for loans, resulting in a further stimulation of the country’s economy as industries proceed to take advantage of cheaper loans and seek to retool and expand.

In the meantime, RBC Group Head, International Banking and Insurance, Jim Westlake, statement that RBC’s and RBTT’s combined operations “make up the second largest banking group in the English speaking Caribbean,” by all accounts is heartening news.”

Whether through strategic alliances with RBC or outright acquisitions, what is important is that RBTT continues to contribute to the growth and the development of the countries in which they operate.

Today, in a much wider sense, the merger of RBTT and the Royal Bank of Canada, a bank described as one of the most profitable in the world, helps to place the RBTT banking family in a far stronger position to do.

Source: Trinidad Newsday
http://www.newsday.co.tt/businessday/0,100597.html
Date: 21-05-09