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.”
Lend at higher rates. As oppose to lend at lower rates . So people can afford to take more. And build better . ?
The Prime Minister is right to call out the banks. I for one dont always support what that PM say but he is right. Customers are paying high fees while waiting months for appointments and loan decisions, even when they have already been pre-approved. Our savings should be helping Antiguans and Barbudans build homes, start businesses, and create jobs, not financing development overseas. The banks must do better.
Just to open an account they give you so so much trouble, we have our pension and social security from overseas, trying to bank in Antigua and give the banks more lending power buy the time they finish red tape you change your mind, even the young locals having the same problem so they spend the money, take weeks to get appointments to open an account nonsense
The banks want your salary, your savings, collateral, a guarantor and your whole life story, and still tell you no.
True
The Prime Minister is a former banker, so he knows exactly how the system operates. Now we need practical action, not just talk.
Honestly, I’d like to hear the banks’ side too. Maybe the requirements are there for a reason, but if too many qualified people getting turned away, then something clearly needs looking at.
They make it extremely hard for the ordinary people to secure loans