What if UTC and FCB did join?

THE EDITOR: Now that we have heard the knee-jerk reactions of a few so-called financial experts concerning the possibility of a merger between FCB and UTC, please allow me to put some more considered views.

As I understand it, any combined entity could boast assets of some $21 billion. The commercial world has become a brutal place, in which size counts. One large company would surely be better placed to prosper, locally and regionally, than two smaller ones. Who said anything about a full-scale merger? What if one holding company operated the two brands separately? Customers could remain with whichever brand their loyalty dictated. This holding company could effect economies of scale by sharing a host of systems and technologies. Might this not enable it to pay better rates on their units/deposit accounts? One extraordinary letter argued that FCB and UTC are in different businesses. Wrong. Every major commercial bank in this country runs at least two mutual funds. UTC is essentially a collection of mutual funds. It even does merchant banking, and has issued ATM cards. So much for that letter. Do some of the naysayers have axes to grind? A certain stockbroking pundit has loudly condemned the merger proposal. Could this be because two thirds of his company’s business is in UTC and he doesn’t want his personal boats rocked?

Finally, let us remember some earlier policy initiatives that were derided by the “experts.” When Government localised the entire banking industry, the experts foresaw disaster. Result? Our banks are among the largest in the Caribbean. When Government established the Deposit Insurance Corporation, forcing all banks to contribute, the experts argued against it. Result? Today, this scheme is a model for the rest of the Caribbean. When Government decided to merge NCB, TCB and Workers’ Bank, the experts said the new bank — FCB couldn’t survive. Result? FCB is declaring profits of over $200 million, is perfectly stable and has just become the only local bank to achieve a “Positive” rating from Standard and Poor’s. The point is, we can’t just dismiss this proposal out of hand. It could well be the best way forward for both companies, and their customers. Remember, experts have a regular habit of being wrong!

ARTHUR JOSEPH
Maraval