Ashford W. Meikle, Staff Reporter
THE COUNTRY'S two largest banks have seen a slip in their share of the deposits and loans in the retail banking industry based on the latest figures from the Bank of Jamaica (BoJ).
On the flip side, the smaller players in the local market - First Global, Citibank, RBTT and FirstCaribbean - continue to show strong gains. As has been the case for the past three quarters, the smaller institutions continued to improve on their share of deposits and loans and advances.
Both the Bank of Nova Scotia (BNS) and the National Commercial Bank (NCB) continue to dominate the retail banking sector, according to the September quarterly report from the central bank. Together, they control the lion's share - 77 per cent - of the industry's $241 billion deposit base.
Similarly, both institutions hold about 74 per cent of the $122 billion of the running stock of loans.
LOW PERFORMANCE
However, this is a decline over the similar period in 2004 when they both controlled about 79 per cent of total loans and deposits.
Both BNS and NCB performed below the industry average in both categories. Overall loans and advances grew by 15 per cent compared to the nine and six per cent respectively for BNS and NCB.
On the deposit side BNS saw a four per cent growth compared to NCB's seven per cent. The latter was more in line with the industry average of eight per cent.
Most banks registered growth in their deposits below the industry average.
One banking executive said "Commercial banks have struggled to maintain their deposit base because of the competition from the money market players.
"Money market players such as JMMB and DB&G have grown significantly because of their aggressive marketing and innovative products.
"The economy has not grown that much to support the growth in their deposits, which they have attracted from the banks. They are competing directly with the banks because they encourage people with small deposits to bank with them," said the banker.
BIG DEPOSITS
Explains senior general manager for the retail banking division of RBTT, Loren Edwards, "We have a securities arm [which began operations this year] and that has captured some of the big deposits."
RBTT's deposit grew by just one per cent in the period under study.
But, at the same time the company's loan portfolio grew by almost 42 per cent, which Mr. Edwards attributed to targeting specific groups. "By doing niche marketing of our products, it has helped to generate growth." For example, specific products are targeted towards teachers, the police and the military.
The RBTT executive also attributes the bank's success to its customer service. "We have a team of both retail and corporate that is focused on customer service. Both teams are very aggressive. The corporate team is constantly on the road. And RBTT was the first to launch a loan sale."
RENEWED FOCUS ON DOMESTIC MARKET
Another of the smaller banks which saw healthy growth is FirstCaribbean International Bank (FCIB), whose loan portfolio increased by 45 per cent. However, managing director of FCIB, Milton Brady, is not surprised at the bank's performance.
He attributes the growth in its loan portfolio to two main factors - leveraging of its merger and a renewed focus on the domestic market.
"What you are seeing is sort of the early indication of that strategy," Mr. Brady said. "We never really lost customers during this [restructuring] period. I think you could say we did not grow along with the market. So, now you are seeing us sort of catching up now. You are seeing the benefits of that leveraging of the merger and our investments in technology."
