The Barbados National Bank (BNB), a subsidiary of Republic Bank, has been awarded Banker of the Year 2003 by The Banker magazine of London, UK. Among Barbados banks, the Banker magazine noted that BNB’s 40 per cent increase in net profit was evidence of the bank’s profitability and stability. Such a significant rise in net profit came highly commended given the current difficult national economic conditions. Despite a contraction in the Barbados economy, BNB improved its returns on equity to 17.8 per cent from 14.3 per cent in 2001 while it lowered its cost-to-income ration to 61.3 per cent from 72.2 per cent.

With an asset base of US$626 million, BNB enjoys a market share of approximately 20 per cent in Barbados with an after-tax profit of US$13.1 million in 2002. Its subsidiaries include the Barbados Mortgage Finance Company Limited and the BNB Finance and Trust Company Limited. The Bank has a complement of 363 employees and six branches across Barbados. Republic Bank Limited became the majority shareholder of Barbados National Bank (BNB), following the completion of purchase of 57% of BNB’s shares on July 31 in Barbados. In accordance with the Takeover Code, Republic Bank made an offer to minority shareholders on conclusion of the transaction with the Government.  With 952 shareholders accepting the offer for sale of shares, Republic Bank has increased its shareholding to 65% of BNB.

Liberalisation of Trinidad and Tobago’s telecommunications sector goes hand in hand with an evaluation of TSTT’s assets. Speaking at the first OOCUR Annual Conference at the Trinidad Hilton last week, Ansord E Hewitt of the Office of Utilities Regulation (OUR) in Jamaica, said his country has already gone through such an exercise and so its experience should be instructive. Speaking on the topic “Asset Valuation: Some important considerations for Caribbean regulator,” he said a first consideration for those charged with the task of regulation is the different emphasis of asset valuation in a liberalised as compared with a rate of return monopoly regime. “Concerns in those markets are not only limited to consumer protection but also to prevent anti-competitive practices, which will have an adverse effect on the entry and sustainability of competition.”

He said since the value placed on assets is a large determinant of intermediate and final consumers charges, the regulator needs to be vigilant with regard to their valuation. The appropriate valuation approach for telecommunications plants, such as TSTT, is one that results in economic replacement values for assets. Among the important issues to treat with in asset valuation are the choice of valuation methodology, appropriate depreciation charges and allocation of overhead charges. In the end, he said the choice of valuation methodology will depend on the nature of the asset that is being valued. “Where an asset is not subject to rapid technological changes, indexation is appropriate for arriving at economic realisable values. On the other hand, where rapid technological changes are taking place, Modern Equivalent Asset (MEA) is the appropriate method.” Hewitt said careful attention has been given to guard against over inflated asset values which simply raise cost to both consumers and competitors. “In reviewing asset values, the regulator should look out for such occurrences as disproportionate allocation of overhead costs, the use of in appropriate loadings, doubling up of charges and lower than industry standard depreciation charges which do not adequately capture technological changes.”

MORE THAN ten years after it filed a case in the Indus-trial Court against Caribbean Ispat Limited (ISPAT), the Steelworkers Union of Trinidad and Tobago (SUTT) lost the matter. In a judgment given last week, the Court found that ISPAT was not guilty of the industrial relations offence claim made by the union, and it dismissed the  application. SUTT’s claim was that about June 24, 1993, ISPAT took and continued to take industrial action in the form of a lockout against about 500 hourly-rated workers employed in the Steel Plant and Boiling Mill of the company’s operations. The union wanted the company to make good any losses in wages and other benefits suffered by the affected workers. At the hearing, Lex Lovell, President of SUTT since 1989 was the principal witness for the union.

He testified that when negotiations broke down between the company and the union for a new Collective Agreement for workers in Bargaining Units 2 and 3, these workers went on strike. Malcolm Grundy, ISPAT’s Vice-Presi-dent (Operations) was brought back to Trinidad from the United Kingdom to testify on behalf of the company. He said that the decision to cease operations was ta-ken, not only because of the absence of workers, but also because of the circumstances existing in the plant and what he termed “uncommon and unauthorised absences.” The Court heard that the entire situation arose, because workers in Bargaining Unit 1 planned selective absences in sympathy with their brethren in Bargaining Units 2 and 3 who were engaged in industrial action with the company. The Court was urged to find that the “judgment call” made by the company to close down temporarily was a justifiable response to the unsafe situation which had arisen. Dealing with a suggestion which implicated the company, the Court said: “For the union to prove the company guilty of taking illegal lockout action by artifically creating a dangerous situation, the union must show in the particular case that the company acted deliberately with intent to cause that enhanced danager as a means sof providing itself with an excuse for laying off workers.

The question of absences came up frequently during the course of the hearing of the matter. In clearing the air in this area, the court said in its judgment: “No employer can prevent an employee from becoming sick, nor can an employer prevent any number of employees becoming sick at more or less the same time. “However, if the absence of such employees, legitimate though it might be, creates a dangerous situation on the premises, the employer would be justified in averting the absence of actual damage to persons and property on the premises by suspending operations.

Trinidad and Tobago is over-banked. Within the last two months, two of the biggest commercial banks in TT and indeed the region have spent big bucks — and made three different acquisitions across the Caribbean. Suresh Sookoo Managing Director and CEO, RBTT offers a simple explanation for all these acquisitions. “We are definitely over-banked in TT,” he says matter-of-factly. He said the local financial sector is relatively crowded because competition has now brought other players into the market. Outside of the financial sector, TT has a very robust credit union and non-financial sectors, he noted. Additionally, he said there are new players in the industry like Island Finance and the emergence of mutual funds. He also noted that more insurance companies are now selling investment-type products that are competing with the banks. “So you have a fairly sophisticated financial market in TT with banks aggressively competing with each other. So part of the strategy by expanding outside of TT is to leverage your existing resource base to better make use of those resources you already have to generate incremental profitability.” RBTT started its acquisition strategy in the late 80s. In those days, Sookoo said the strategy would have been to acquire relatively small banks. “We basically went out into the Eastern Caribbean and we bought banks and concurrent to that we got into the Dutch Caribbean also with fairly small banks.”

He said the major impetus would have really taken off in 2000 when RBTT got into Jamaica and acquired the former Union Bank. He noted that subsequent to that, they had an opportunity to acquire ABM Amro operations in the Dutch Caribbean. However, in order for RBTT to acquire that operation, they first had to purchase one of the bank’s subsidiaries in Suriname. “It was a strategic decision to get into Suriname first, knowing that we would have had the option for the Aruba, St Maarten and Curacao operation of ABM Amro which were bigger markets,” he explained. RBTT’s most recent acquisition was in Barbados. Sookoo said the bank did not have a presence in that country and the acquisition of Ernst and Young Trust Corporation will give it an offshore dimension, which it already had to some extent in the Dutch Caribbean. He said while this is a very small acquisition, they hope to leverage their capability across the Caribbean. “This is a strategic move in the realm of trust and asset management that we look to expand on.”

RBTT has a presence in St Lucia, Suriname, St Vincent and the Grenadines, St Kitts and Nevis, Grenada, Curacao, Aruba and Jamaica. He said when a bank makes an acquisition in another country, it is really diversifying its dependence on one economy for its revenue stream. Sookoo said the RBTT is able to separate itself from the competition because it has a very successful merchant bank. He explained that by having a physical presence in which they have jurisdictions, the merchant bank has found it easier to win business. With expansion comes increasing costs, he said, noting that one of the challenges of any company in an expansion mode is that you need to have an internal capacity to absorb, turnaround and begin to build that common footprint. He said the challenge for any company, including RBTT,  is the rate at which it can absorb and integrate the expansion without losing sight of their core business.

Larry Howai CEO, First Citizens Bank (FCB) said they have not yet extended their reach into the Caribbean. However, he said he would like to see the bank develop into a regional franchise. “Not just for TT, but eventually having a reach that is out into the wider Caribbean area. I see the bank being at the forefront of information technology and being able to use that technology to provide convenience and flexibility for our customers while at the same time keeping the cost of providing that service as low as possible.” He also sees FCB playing a more important role in the corporate and commercial sectors of the economy and in one of the leading financial institutions in TT. However, before expanding its reach, he said they will be paying close attention to the effects of the Free Trade Area of the Americas (FTAA).

“While we have a vision of going into the wider Caricom area, we want to be careful that we do so in a way that adds value and does not create undue risk for the institution.” Simone Penco Manager, Commercial, Scotiabank said that with operations in 25 countries, including more than 250 branches and over 500 ABMs across the Caribbean and Central America, “we already have the largest presence of any bank in the region.”
However, she said they continue to see their operations in the Caribbean and Central America as a key growth area and an important part of Scotiabank Group’s international strategy.

On July 8, 2003 Scotiabank announced plans to more than double their size in the DR, a country in which they have operated for more than 83 years.
Sookoo said RBTT has stayed within the English speaking Caribbean, but added that they are always looking for opportunities. “We have not really been able to get into retail banking in  Barbados and the reason for that is because that country has a relatively over-banked market and you cannot go there greenfield. You have to go there and acquire something.” He said the bank has its “tentacles” up for anything that is on the cards that might make sense to them. He said Barbados remains a prime target because of the strength of their economy and Central and South America. He said they also have an interest in the DR, the Bahamas and the Cayman Islands.

 

Since the launch of the “Excellence in Business Awards” competition in June, eight finalists have been selected to go on to the final phase of judging in the competition whose objective is to provide recognition for businesses in Trinidad and Tobago and to identify the key factors that have made them successful.
Here is another of the finalists in the Food and Beverage category:

Stuart Brothers (WI) Limited

Stuart Brothers (WI) Limited is the largest manufacturers of flavouring concentrates in the Caribbean and are responsible for the tastes of many of the popular drinks and snacks at the local and regional supermarkets. Originally part of the Givaudan-Roure Group, world leaders in the flavour industry, Stuart Brothers have demonstrated a strong and unwavering commitment to quality, having become ISO 9002 certified in October 1999, the first flavour house in the Caribbean to receive this internationally recognised standard. The Excellence in Business Awards is a joint initiative of the Business Development Company and Republic Bank Limited. This year’s awards ceremony will take place at the Hilton Trinidad and Conference Centre on October 7, 2003.

Most people think solving crime nowadays is a job for a super hero, someone with super-human strength and magical powers. But Dwight Andrews has a plan to change the thinking of society when it comes to dealing with crime, especially crimes committed by the intellectual criminal, the mastermind with more qualifications than the law enforcement team trying to catch him. This type of mission impossible scenario is just the thing to excite Andrews. He started QM Caribbean Ltd in 2000, a company that handles, among other things, security risk management. People used to be very nonchalant about security, they bought surveillance cameras because it was the “thing” to do, said Andrews, and this has not helped in preventing crime. “It is unfortunate, the situation today, because the red flag has been there for years,” said Andrews of the  crime problem.

Being one of the only certified fraud specialist in the Caribbean, Andrews felt his expertise could make a difference and formed a team of specialists with varying backgrounds in law enforcement. His main focus has been on risk consultancy, an area Andrews feels has been neglected by local companies. He said companies have, for a long time, only used a simplistic approach to crime solving and detection and this can eventually lead to their downfall. “This simplistic approach is reluctance on the part of those in charge (the companies) to accept the responsibility for some of the crimes we have now,” said Andrews. But an increase in corporate crime has spurred companies to take action, and that’s where professionals like Andrews comes in. But this sudden awareness comes at a high price for many companies, since they only realise they have a problem when crime affects profitability and reputation. That’s a common, dangerous mistake, said Andrews. “If we can accept that the whole world is intertwined and connected through communication, then you are supposed to anticipate that the deviant members of society are going to pick up modern ways to commit any type of crime, whether it is fraud or larceny,” said Andrews.

The criminal element no longer climbs through windows or steals cash from a hidden tin in someone’s dresser; he goes into your bank account and transfers your money to his own, swiftly and efficiently, added Andrews. Companies turning a blind eye to this are stuck in a myopic way of thinking, he added. Concentrating heavily on risk consulting, Andrews also offers security merchandising and technological support for companies. Andrews has covered every spectrum of a company’s security needs: detection, prevention, and solution through physical, digital and intellectual means. Apart from being a Certified Fraud Specialist, Andrews also has 15 years experience in the field of security and law enforcement. He has worked at Republic Bank, MTS and Hilton Trinidad. He also holds a post graduate diploma in Public Administration, a Bsc in Law Enforcement and an Associate of Arts Degree in Criminal Justice.

This, Andrews said, is the sole difference between our existing law enforcement and the law enforcement the country really needs. “Many of those working in law enforcement today did not study this. They are not working in their field of study and that makes a difference,” said Andrews. The typical security company is not his forte. While he acknowledges that guard dogs, hand-cuffs and security cameras are important, he believes that to prevent crime and solve it, education and the ability to analyse and problem solve is more vital. “The fact that we feel we can solve problems with that type of security alone represents the lack of knowledge of society we have about protecting ourselves,” said Andrews.

Drawing reference to the Y2K scare building up to 2000, Andrews said this type of detailed analysis and recognition needs to be enforced in local security and safety measures. “During Y2K, we knew a risk existed and things were put in place in anticipation of a disaster,” said Andrews. Grinning mischievously, Andrews said people tend to look at security as the new “sexy topic”, without really considering what it entails. And this lack of judgement is something he hopes to remedy. “My approaches do not include trial and error. I believe we can anticipate security breaches and we can analyse what is in front of us,” said Andrews. As far as he is concerned, data can allow a professional to draw logical, sometimes improbable conclusions. Com-panies cannot always recognise a security risk, said Andrews. “A lot of them are not structured to really measure what they are losing from their bottom line as a result of losses due to fraud and misappropriation,” said Andrews. To illustrate his point, Andrews said if a company catches five people committing fraud, they immediately believe they have a problem. But, he added that fraud can go on for years without any detection because companies ignore the signs or look at the wrong type of evidence. “If, for instance, if you have stock of $100,000 and that stock when sold is supposed to make you $250,000 and your $100,000 stock is only showing revenues of $180,000. This type of information is more relevant than whether or not you caught people,” said Andrews. Why? “Because they may have made the $250,000 in the first place and lost it through misappropriation,” said Andrews. Another reason fraud and misappropriation thrive is the fact everyone knows each other. Andrews feels there is a reluctance to point a finger at people and pass judgement on them, especially when you work with them.

The time for depending on your pet dog and a cutlass to protect your business has past. According to Andrews there are systems that allow you to do just about anything with security. You can have locks that open at a particular time, automated gates and even motion sensor lights. But when it comes to protecting yourself from fraud, you need to dig a little deeper into your pockets and into the past of the people who work for you. Andrews recommends that companies do background checks on all employees, especially in an environment like banking or insurance, where money is constantly switching hands.

He also recommends that companies have protective software installed to ensure employees cannot tamper with information. While these measures may make a difference, Andrews stressed that putting a stop to fraud within a company takes a lot more time and effort on the part of a professional. Those who are untrained may ignore information that can be key to solving a crime. To illustrate his point he said local security companies often sell clients more cameras than they actually need to protect their businesses. “It is irresponsible for a company to give you more cameras than you actually need. Not from an economic or moral standpoint but from a security standpoint.

Because the amount of cameras visible in a particular space is an indication of what you are trying to protect. Cameras make people suspicious about the type of business you have,” said Andrews. He said that while security companies try to be responsible, in their quest for money, they lose track of this and give people bad advice. He added that the key to having a successful security practice is selling people integrity and honesty, because if you cannot trust the person protecting your home and your business, you cannot trust anyone.

Angostura recently  presented the Trinidad and Tobago Hotel and Tourism Institute (TTHTI) with a large quantity of the company’s products for the Angostura Training Bar situated in the Food and Beverage area of the Institute. This is the bar used by the Institute’s Food and Beverage department to train all its bartenders. The company said it understands the need for students at the Institute to gain proper knowledge of the products which the company produces and of their many uses in food and beverage preparation. The company will continue a relationship with the TTHTI to ensure that students in the Food and Beverage department are well equipped to study the art of bartending and food preparation.

Republic Bank was pleased to present prizes to winners of the “Right Start Makes you a Winner!” two-month competition recently. Scores of Right Start account holders who made minimum deposits to their accounts won prizes from Kiss Baking Company, Prestige Holdings Limited — franchise holders of KFC and Pizza Hut and hampers and gift certificates from RightStart merchants such as Bluegrass, Gold Mine Jewellers, SM Jaleel, West-port, RIK Bookstore and Rhyner’s Record Shop. Over ten lucky winners visited Republic’s head office to collect their prizes from Marketing Official Christina Rodriguez who encouraged them to enjoy their prizes and to keep making regular deposits to their Right Start accounts.

Laurie Barnard, Chairman of St Lucia Distillers, has been named the 2003 Ernst and Young Caribbean Entrepreneur of the Year. The award ceremony took place last Saturday night at the luxurious Ritz Carlton Hotel in Montego Bay, Jamaica. Barnard will go on to represent the Caribbean at the Ernst and Young World Entrepreneur of the Year awards in Monte Carlo next May. The Caribbean Entrepreneur of the Year Award is presented by the professional services firm, Ernst and Young and is supported by companies such as platinum sponsor, Republic Bank Limited. This is the seventh year of the programme which recognises and honours the contribution of entrepreneurs to the economies of the region.

St Lucia Distillers Ltd produces some 27 different award winning rums, liquers, creams and punches. Their products can be found throughout the Caribbean, as well as the United Kingdom and recently Canada, and there are plans for further expansion. The lone distiller in St Lucia also imports wines and provides specialised machines and provisions to hotels. Current output stands over one million litres of alcohol per annum and the company has an annual turnover of approximately US$11 million. Barnard has been Chairman of St Lucia Distillers since 1989. He credits their ability to keep pace with global competition to their heavy investment in research and development, resulting in innovative new products and packaging. Fifteen finalists from five countries vied for awards in five categories. Only finalists in the Emerging Entrepreneur category were not eligible for the overall award.

In addition to the overall Caribbean Entrepreneur of the Year award, Barnard also gained top honours in the Manufacturing category. Vincent Chang, CEO of Tastee Ltd won the award in the Retail category and Anthony Thorne of Wilderness Explorers in Guyana won the Tourism award. The lone woman in the pack, Audrey Hinchcliffe, founder of the Jamaican cleaning company, Manpower and Mainten-ance, clinched the award in the Services category, while the winner in the Emerging Entrepreneur category was Trinidadian Gregory Noone, Managing Director of Optik Technologies. Jamaican businessman, the Honourable John Issa was named Master Entrepreneur for his contribution to business in the Caribbean. He is the executive chairman of the Superclubs chain which includes the Grand Lido, Breezes and Hedonism hotels. He is also chairman of the Pegasus Hotels in Jamaica, vice chairman of the Gleaner newspaper and a director with Grace Kennedy, Globe Insurance and the Jamaica Stock Exchange.