By Andre Huie
BASSETERRE, St Kitts (WINN) -- Last week, governor of the Eastern Caribbean Central Bank Sir Dwight Venner suggested that indigenous banks in the Eastern Caribbean should amalgamate to become more viable in challenging financial times globally.
However, financial analyst Schneidman Warner disagrees.
“I do not know whether or not that is the answer. If you have three poorly run banks and you merge them… it’s still one large poorly run bank rather than three smaller poorly run banks,” Warner said.
He suggested that the Central Bank governor should look at “greater bank operation efficiency.”
The accountant also pointed out that the indigenous banks face stiff competition from international banks operating in the region and headquartered in Canada.
The Central Bank governor, during a presentation after his Economic Review of the Eastern Caribbean Currency Union, said indigenous banks in the sub-region have much greater challenges than regional commercial banks such as First Caribbean International and Royal Bank of Canada.
These international banks have been releasing workers and tightening their operations, the governor noted, making an even stronger case for local banks to merge.
Warner noted the main problems facing banks in the sub-region is their willingness to lend in the current financial climate.
“I don’t; think the financial sector on a whole is under threat; it comes down to individual banks, whether they have the benefit of good management rather than the sector as a whole,” Warner said.
Republished with permission of West Indies News Network