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Home grown and ready to compete
11/25/2008
IN the face of globalisation it is heartening to see that local organisations are ready, willing and showing that they are able to compete with foreign entities that are seeking to come into the market and dominate.
Over the last couple of weeks we have been hearing a number of utterances from one of this island’s leading institutions, which has been making a call to all challengers to “bring it on”.
Within the last few years, the Barbados National Bank (BNB) has been able to carve out a position as the leading commercial bank on the island, boasting that as a “home grown” institution, it has been able to outperform the big guns, these being the foreign-owned banks.
It must be noted here however, that BNB is no longer Barbadian-owned, with the local Government giving up their majority ownership back in 2002. Therefore, when the term “foreign owned” is used, it refers to institutions that have their origins extra-regionally, considering that BNB is now owned by the Trinidadian-based, Republic Bank.
Managing Director and CEO of BNB, Robert Le Hunte, stated a few weeks ago at a media conference to review the company’s performance for the 2007-2008 financial year, that BNB has grown by partnering with another Caribbean institution, but for all intents and purposes the institution is still Barbadian.
He argued that the partnership has only served to increase BNB’s strength, noting that since the handover of ownership, the company has grown significantly in terms of membership, deposits, and profitability.
This growth has been so significant that, as mentioned before, BNB has been rated as the top bank on the island over the last couple of years and, despite having a slower year in terms of growth for 2007-2008, Le Hunte is of the opinion that given the fact that all of the banks are competing in the same market, BNB will maintain this top position as all other competitors would have experienced slower growth as well.
As the banker mentioned, BNB has grown since partnering with its Trinidadian counterpart, which is a move being advocated based on the argument that institutions of any type would be better able to maintain and even enhance their position against incoming entities, and also be able to go out into the international market and compete, if they increase their capacity by making interregional linkages.
The increase in capacity could come from tapping into greater human and investment capital, raw materials, as well as strategic competitive advantages, based on the strengths of individual islands throughout the region.
Of course none of these issues are new, having been discussed at length as they relate to the CARICOM Single Market and Economy (CSME). However, there still appears to be a significant level of disjointedness, which showed itself for example in the run up to the “controversial” signing of the Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU).
The argument can be made however, that businesses do what is in the best interest of business and will take the necessary steps to improve their position in the market that they are currently in, and also in any markets that they wish to enter.
In light of this, it could be expected that more entities will tap into the regional pool as the long-term benefits start to reveal themselves, therefore developing regionally “home grown” institutions, ready to compete.
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