Bahamas - FirstCaribbean International Bank

R. K. Phillips
Managing Director, Retail Banking
Retail Banking
A year of Challenge and Opportunity
This has been a very challenging fiscal year for the Retail Banking Strategic
Business Unit during which we made significant changes to our business
model and faced unfavourable competitive conditions in three of our major
markets which impacted loan growth and interest margins.
Financial Performance
In summary, Retail Banking contributed net income before tax of $48 million
against a 2007 plan of $56 million and a prior year contribution of $60
million. Performance against 2007 plan was primarily impacted by significant
under plan performance in our revenue in Bahamas and Jamaica and
Barbados business units resulting from weak loan volume growth and rising
deposit costs. In addition to these factors our performance against prior year
was also impacted by changes in the accounting for depreciation, employee
bonuses, and advertising and promotion.
On the balance sheet side we concluded the transfer of loan balances of
$225 million and deposit balances of $688 million to the Wealth Management
Strategic Business Unit to achieve the consolidation of our international
and domestic wealth businesses. When normalised for this transfer, overall
loan volumes grew by $117 million or 6% over 2006 and deposit balances
remained stable.
Customer Experience
The majority of our Retail customers continue to express satisfaction with
our services. Overall customer satisfaction increased marginally from 69% in
January to 72% in July 2007. Satisfaction with branch services dipped by 2%,
from 69% to 67% over the same period. Loyalty to FirstCaribbean by Retail
customers, however, remained high at 78%. During 2007 we introduced
Helpful Partner as our major internal and external customer service initiative.
76% of Retail customers expressed satisfaction when surveyed against the
Helpful Partner standards. We will embed distinct business units Helpful Partner
standards in 2008 and will expect that this together with the planned
reorganisation of our branches will drive further improvements in customer
service.
Our People
The training and development of our people remains a priority for Retail
Banking. Our focus in 2007 was on continuing to equip our people to deliver
improved customer experience and on sales effectiveness. The more than
1,300 retail staff from our 16 countries were critical to our performance in
2007. They continued to deliver excellent service and to sell products to our
many existing and new customers despite the constraints faced this year.
Looking Ahead
During 2007 we completed the implementation of stronger geographic
management roles to improve the efficiency, control, service delivery and
financial performance of our branch network. We are committed to making
our branches places where customers can have an exciting and enjoyable
experience while having their needs met by our professional staff. We expect
this to pay dividends in 2008 as we strive to gain increased share of wallet
from our large pool of existing customers built up by significant market share
growth in most countries over the last four years. Most of these customers
currently use only one of our products. We are also continuing to strengthen
our insurance capability to expand the penetration of our existing customer
base.
In addition to the above, we have already begun to experience some alleviation
in the negative factors which impacted us in 2007 and we expect to see
a return to profitable growth in 2008.
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