Cayman National Corporation – which owns Cayman National Bank – is winding down its interests in a Turks and Caicos bank due to economic uncertainty in the eastern Caribbean territory.
According to a statement issued by Cayman National on Tuesday: “Cayman National Corporation decided to become an investor in the International Banking Group (TCI) Ltd. (IBG) some years ago, at a time when economic conditions were far more favorable than they are now.
“In the original business plan for IBG it was predicted that the new bank, which opened its doors in 2010, would be loss-making for the initial period of trading but various unique events have conspired against the success of the new bank.
“These included the world-wide economic crisis, the impact of the failure of TCI Bank and the uncertainty that the constitutional crisis in the Turks & Caicos Islands generated. As a result, and despite measures to reduce costs, IBG has found it difficult to develop new business and ongoing losses have far exceeded original expectations.”
Cayman National officials said the circumstances require an “orderly wind down” of retail banking in the Turks and Caicos which ensures that all depositors of the bank are paid in full.
“This process will now commence and customers of the bank in the Turks & Caicos Islands are being advised accordingly,” the Cayman National statement indicated. “We would also mention that for practical reasons it is preferable for IBG to continue to provide merchant service and credit card facilities.
“We would emphasize that the closure of the bank in the Turks & Caicos Islands will not affect Cayman National’s operations in the Cayman Islands or in any other of the jurisdictions in which it operates.”
In 2011, IBG – in which Cayman National Corporation holds a majority share – made 10 staff members redundant as part of a restructuring programme.
Stuart Dack, president and chief executive of Cayman National Corporation, said at the time that the restructuring at International Banking Group would have no bearing on Cayman National Corporation staff in the Cayman Islands.
Mr. Dack, who is also the chairman of International Banking Group, explained the redundancies in a press release.
“… [T]he impact of a global recession, local economic slowdown, and instability in public finances coupled with delays in opening the new bank, which were outside of our control, have resulted in a slower initial development of the bank than anticipated,” he said. “With these factors in mind it is with great regret that we have made the decision to restructure the business and in the process make some staff redundant.”