Antigua and Barbuda’s PM Accuses Local Banks Of Failing Borrowers with Conservative Lending

Finance Minister and Prime Minister Gaston Browne has launched a sharp attack on Antigua and Barbuda’s commercial banks, accusing them of relying on fees, delaying loan decisions and sending domestic savings overseas instead of financing local growth.

Browne a former banker, said an IMF assessment found that banks remained highly liquid but conservative, with business credit growing by only about three per cent and overall domestic credit remaining stagnant.

“Our banks, to some extent, are failing us,” he said. “They rely almost exclusively on fees in order to turn large profits.”

He urged banks to finance more mortgages and proposed housing or savings bonds of EC$50 million to EC$100 million that could fund government construction. The banks, he argued, would benefit twice – first by lending to the Government and later by providing mortgages to buyers.

Browne criticised waits of three months for appointments and a further three months for financing, even after applicants had received pre-approval. He described the model as “conservative, lazy banking.”

Government-built homes, he said, present relatively low lending risk because the land and construction inputs are subsidised, leaving buyers with substantial equity.

The prime minister warned domestic institutions that larger competitors could reduce their market share. He referred to the planned sale of CIBC Caribbean and the possible sale of Caribbean Union Bank as developments that could introduce stronger rivals.

“Bank of Butterfield may displace them if they continue to be so conservative,” Browne said.

He argued that banks also sacrifice potential earnings when they place deposits in low-yield US securities rather than lend locally at higher rates.

“You all need to step up,” he said. “Use your creativity. Do something.”