Home' Trinidad and Tobago Guardian : December 24th 2015 Contents position, you would try to make sure you
do not put those reserves at risk because it
can disappear very quickly. The other part is
that the country only has 35 per cent of what
it got before. As a country it is based on energy
and most of the flows comes through either
the Central Bank as the Government collects
taxes in US dollars or comes in through direct
sales from energy companies. I would say the
Central Bank represents about one third of
the supply. So the banks rely on people selling
money and Central Bank. Once the banks get
that money, the bank will look at how it sells
to different demands. The fact is that the
demand is greater than the supply. Even when
oil prices were US$100 the demand was greater
than the supply. So just imagine when it is at
He said the solution is to prioritise which
sectors get US dollars.
"The priority has always been people who
are into business and trading. There is a man-
ufacturer who wants to bring in raw materials
and our bank will give you priority over some-
one who wants US$200,000 to buy a house
in Miami. If buying a house in Miami is some-
one s need, our bank will put you low down
on our list. So T&T has less US dollars and
it has adjustments to make. We have a spending
pattern based on a price of US$100 and the
demand side must change."
He said the bright light is that some of the
tourism-driven economies of the Caribbean
are starting to see growth again and, as their
economies grow, they will have the capacity
to import more T&T-made goods.
He added that Republic Bank is doing its
part in diversifying the economy. Over the last
three years, Republic Bank earned US$125 mil-
lion in dividends from its overseas subsidiaries.
"Diversification is also about geography,
new markets. When we invest overseas, where
does the surplus come back? Diversification
gets surpluses into the country. Surpluses of
our overseas investments come back to T&T.
We started this process over 20 years ago as
we wanted to be a net earner of US dollars.
Those net earnings of US dollars is what we
will use for overseas investments."
Dulal-Whiteway spoke to the Business
Guardian last Thursday at his office, Republic
He joined the bank in 1986, has been a
director at the bank for the last 19 years and
managing director for the last ten.
Next February he will be retiring from the
bank at age 60 and his replacement will be
He said Republic Bank s main operation is
in T&T and there are subsidiaries in Guyana
and Grenada where they own 51 per cent of
the operations in those territories.
In Barbados, Republic Bank owns 100 per
cent of the operations there.
The bank has an office in Cuba, an offshore
bank in the Cayman Islands and it owns 20
per cent of the operations in St Lucia.
It owns 57 per cent of HFC Bank in Ghana
after getting into that market three years ago.
They also acquired a Suriname bank in 2015.
Dulal-Whiteway said Republic Bank is 178
years old, which he described as a "long and
strong" history. He said when he assumed the
position as managing director his main goal
was to build on the bank s accomplishments.
"The bank is not a start-up operation. It
was really how to build on that. My goal was
to add value to what was there before."
After strong economic growth in the national
economy in the early to mid 2000s, he said
the "challenges" started in 2008.
"In 2005, the economy was going good but
in 2008 there was the financial crisis. We had
bigger challenges. Then there was Clico---
which owned 51 per cent of the bank---getting
into financial difficulties. So there was the sit-
uation where our major shareholder got into
difficulties and there was a concern in the
public as to if this would impact on the bank."
He added that the bank has had discussions
with past finance ministers regarding Clico
especially at the time of the establishing of
the Clico Investment Fund.
Despite these difficulties, he said the bank
was able to maintain a conservative stance
and it was able to "ride through the storm."
"In 2008, the US banking system was col-
lapsing. We were actually net lenders to the
US banking system because we had surplus
funds deposited in that system. The big concern
was if we could have gotten our deposits. We
did not lose anything though. Subsequently,
we decided to focus the strength of Republic
Bank s balance sheet."
Today, he said, Republic Bank has a strong
"Our capital ratios are strong. Non-per-
forming loans in T&T is at one per cent, the
lowest it has ever been. Given that strength
of balance sheet, we feel as if we are in a good
position to withstand any further challenges
that may come our way."
He said the Republic Bank group s asset
base is about $66 billion and, in 2015, they
made a profit of $1.2 billion.
He described the profit after tax over the
last five years as being "stable" and growing
gradually at one to two per cent per annum.
"Traditionally, in the 1990s and early 2000s,
we doubled our profits every three to four
years. This time it took us ten years to do it.
The reason being the market changed amidst
the financial crisis. Our focus has always been
on how to remove volatility in our income
streams. When you look at our competitors---
RBC, CIBC---they made losses during that
period. Republic Bank, however, had no losses.
We grew slower than in previous years."
He said it is because of this performance
that this year Republic won Bank of the Year.
He also said they are the largest bank in the
"For example, with mortgages we have 48
per cent of the market. In loans, we have 38
per cent. In deposits, we have 33 per cent. We
have the largest customer base."
He said Republic Bank now owns 57 per
cent of HFC Bank in Ghana.
"We had challenges over the first few years
in trying to get into a controlled position. We
had 40 per cent and we needed to get over
51 per cent and we had to make an offer to
the other shareholders as it was mandatory.
There were some legal battles trying to stop
us from making that offer. Eventually we won,
made the offer and got another 17 per cent
shares which is what we were happy with.
We wanted strong local ownership as it is a
new market and we need to build partners."
He said three of the bank s employees are
in Ghana as well as the managing director.
"We are trying to build a foundation which,
over time, can grow to something much better.
That market is not as developed as T&T as
our economy is much stronger. But that market
provides us with an opportunity to add value.
I cannot see us, as a bank, adding value in
Miami but we can add value in Africa where
there is huge potential for growth. Ghana has
27 million people. It gives you an idea about
scale as banking is all about scale and we can
spread and be competitive with prices."
He also said during the course of 2015, the
bank had the opportunity to buy RBC s oper-
ation in Suriname, which they thought was
a good deal.
"We bought it and we think the market in
Suriname has good long-term potential. Suri-
name has a commodity-based economy like
T&T so it has similar challenges to T&T but
that market provides us with a balanced port-
folio. Cuba and Barbados are tourism-based.
Guyana and Suriname are commodity-based
while Guyana is an emerging oil producing
country. They also produce gold and cocoa."
In terms of current trends in the local bank-
ing industry, he said there is more regulation
and banks will have to adjust to those changes.
Technology has also had a big impact on
the local banking sector, he said.
"With technology there is a great oppor-
tunities for the banking sector but also it means
we have to re-tool to meet customer needs.
Despite this, many customers still like using
bricks and mortar. They want to come into
the branches to do businesses. So we have
also had to build new branches over the last
couple years. We have about 42 branches in
Trinidad and in Tobago. It is a mixture of
"clicks and bricks."
Last week, Republic Bank announced the
formation of its holding company, Republic
Financial Holdings Ltd (RFHL).
The restructuring, completed on December
16, was effected by a vesting order under the
Financial Institutions Act, Chap 79:09, in
T&T, and successfully brings the structure of
the Republic Bank Group in line with inter-
national best practices to facilitate future
Dulal-Whiteway noted that the bank had
grown significantly over the years, resulting
in the company performing the dual role of
a licensed commercial bank and the holding
On Monday, he told the Business Guardian
by email that prior to establishing the holding
company, Republic Bank was both an operating
bank for T&T and a holding company.
"As we grow through acquisitions, separating
the business of the bank in T&T from the rest
of the group became necessary in order to
better manage the group and enhance the
overall governance structure.
"The new structure is seamless to both cus-
tomers and shareholders as customers will
continue to bank at Republic Bank and share-
holders will now have a share of Republic
Financial Holding Ltd and not Republic Bank
Ltd. There should be no change in the eco-
nomics of the group and hence the share price."
DECEMBER 24 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
COVER STORY | BG5
slow but steady
From Page 4
PHOTO: RISHI RAGOONATH
we have 48 per cent
of the market.
In loans, we have 38
per cent. In deposits,
we have 33 per cent.
We have the largest
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