“Strategic initiatives aimed at strengthening the competitiveness of the market will be a key objective in 2021”
NASSAU, BAHAMAS – The total number of licensed banks and trust companies in the Bahamas decreased by 10 in 2019 and was further reduced from four in 2020 to 217, according to the Central Bank.
The regulator, in its March Quarterly Economic Review, noted: âTotal employment in banks and trust companies declined from 158 (3.9%) to around 3,843 in 2020, extending the decline by 1, 2% in 2019 and an average annual decrease of 2.2% compared to the last five years.
âAn analysis by nationality revealed that Bahamian and non-Bahamian positions decreased by 155 (4.1%) and three (1.2%) to 3,599 and 244 respectively. As a result, the Bahamians ratio in the banking sector fell by 10 basis points to 93.7%, compared to the same period in 2019.
âA breakdown by function assigned showed that a majority of Bahamians were engaged in local banking roles (66.6%), followed by international banking (13.9%), fiduciary administration (11.3%) %) and other activities related to wealth management (8.2%). . “
The Central Bank further noted that last year total employment in the domestic retail banking sector declined from 71 (2.2 percent) to 3,124, a turnaround from an increase of 0.4% in 2019 and an average annual reduction of 0.4%. between 2015 and 2019.
Likewise, employees in the international sector contracted from 87 (10.8%) to 719, extending the 7% drop from the previous year and an average annual contraction of 7.8% over the past five years. “, noted the regulator.
âIn terms of composition, the total number of Bahamians in the national banking sector fell from 65 (2.1%) to 3,051 after remaining unchanged the previous year. In addition, the total number of non-Bahamian employees fell by six (7.6%) to 73, from a growth of 19.7% in 2019.
âAs a result, the ratio of Bahamian employees to non-Bahamian employees strengthened to 41: 1 from 39: 1 the previous year.
âIn the international sector, the total Bahamian workforce declined from 90 (14.1%) to 548, down from 6.7% in 2019. However, the number of non-Bahamians increased slightly by three (1 , 8%) to 171, compared to a drop of 8.2% last year.
The report also notes that commercial banks recorded a net loss of nearly $ 63 million in the fourth quarter of 2020, reversing net profit of $ 61.6 million in the same period of the previous year. In addition, for the first quarter of this year, total private sector loan arrears increased by $ 22.9 million (three percent) over the three-month period, and by $ 108 million (15, 7%) year-on-year to $ 795.9 million.
The regulator concluded that despite headwinds encountered during the year due to the COVID-19 pandemic, where IFSs had to adjust their operations to comply with emergency orders, the entire financial sector is remained relatively stable.
âModest gains have been made in tax revenue and spending in the local economy. However, cost considerations and gloomy credit market conditions have reduced operating prospects for the domestic sector, âthe Central Bank noted.
âIn addition, the Bahamas continued to experience job cuts in the domestic and international sectors, in part due to the pandemic and the provision of severance packages.
âNonetheless, the strong regulatory regime and the pool of professionals supporting the industry continue to promote The Bahamas as a jurisdiction of choice, adding value for clients in various dimensions.
“With the adoption of revised legislation for most of the sector during the year, strategic initiatives to strengthen market competitiveness will be a key objective in 2021 for all regulators.”