First Citizens not hurt by lower interest rates
At least one commercial bank is reporting no change to its customer base, following its decision to lower its interest rate on deposits earlier this year.
In fact, Branch Manager of Retail Banking and Central Services at First Citizens Bridgetown branch Ryan Hunte told Barbados TODAY the financial institution had been attractiing more customers, especially small business clients.
Following the removal of the 2.5 minimum interest rate by the Central Bank of Barbados with effect from April 1, 2015, banks have been offering an interest rate of 0.5 per cent on deposits, the lowest in over 20 years.
Admitting that there was public outcry, Hunte told Barbados TODAY after the dust had settled First Citizens did not witness any exodus of customers.
“Some people have looked around for other investment vehicles including the Government savings bonds, but I don’t think it had a real impact as such on people moving money and so on. I don’t have the data but there hasn’t been a mass exodus or anything like that,” Hunte said.
“We have been attracting a lot of new, especially small business clients simply because we have been trying to concentrate on service and providing the relevant solutions that would make our product attractive. We are one of the smaller players in the market but at the end of the day we are trying our best in terms of being able to provide the service that will keep people coming back.”
When asked about the likely impact of the increased tax on bank assets from 0.2 per cent to 0.35 per cent, the banking executive said it was too early to tell.
However, he assured that changes in interest rates on savings or loans would depend on a number of factors, including the impact of the increased tax on the overall business, as well as the Central Bank’s base lending rate.
First Citizens today allowed two small businesses to showcase their products at its Bridgetown branch, with more expected next Friday and during Small Business Week from September 18 to 24.
“It is an opportunity for people to really come and advertise free of cost and also to allow the public to see that the bank is putting, pretty much, the money where their mouth is,” Hunte said.
The two businesses showcased today were the four-year-old Miracle Balm and one-year-old Genuine Herbs and Wellness, operated by Carlos Jones and Elizabeth Ward, respectively.
Jones told Barbados TODAY it was critical that well-established organizations assist the fledgling ones.
“I think this is very good to see the banking institution showing an interest in small businesses and giving us the opportunity to exhibit here. It will help us to reach a part of the target market we would not normally reach in other locations. Giving us this opportunity will help us to grow,” Jones said.