Ronald Carter, CEO and Chief Country Officer, JMMB Bank: Interview

Interview: Ronald Carter

In what way has growth in financial services contributed to diversification strategies?

RONALD CARTER: The Central Statistical Office reports that the financial services and insurance sectors contributed 7% to GDP in 2018, up from 5.6% in 2014. Given that GDP has fallen by 12% over that period, these sectors have a growing economic importance.

Trinidad and Tobago continues to maintain a strong banking system alongside good governance and many well-capitalised financial institutions. The opportunity for local banks to have an optimum combination of online, mobile and brick-and-mortar solutions is most relevant to T&T. Furthermore, the country benefits from a highly educated workforce. Taken together, these factors lay the path for the banking industry to grow further and make an even larger contribution to GDP.

How much focus is placed on supporting small and medium-sized enterprises (SMEs)?

CARTER: Financial institutions are becoming increasingly active in this area; funding and supporting SMEs is a primary focus. Our aim is to help them access resources and obtain advice. We support SMEs by pulling together the different facets of business, from strategic planning to marketing and legal help.

Another emerging area of support is the expansion of alternative forms of capital funding. While businesses in T&T have historically been highly reliant on bank debt, bank debt is not suitable for all entrepreneurial ventures at every stage of their life cycle. SMEs in the country therefore require access to multiple types of funding, and we are progressing in that regard. Angel investment, venture capital and even private equity are becoming increasingly present here. The development of alternative bank financing that is well structured will be a critical growth factor not only for supporting the build-up of businesses, but also for the ease of doing business.

What impact will the 2020 budget have on the banking sector and its stakeholders?

CARTER: The amount allocated to the Public Sector Investment Programme for 2020 is TT$5.3bn ($783m), or TT$1.7bn ($251.2m) more than what was spent in 2019. We can expect this increase to provoke some level of job growth and, by extension, an increase in consumer spending. A few capital market issuances were announced in the budget: the National Infrastructure Fund II, valued at TT$1.3bn ($192.1m); a housing bond, worth TT$1bn ($147.7m); and the Tobago House of Assembly’s bonds, at TT$300m ($44.3m). These capital market issuances will have a positive impact on financial institutions and investors. Secondary market activity in fixed-income securities, however, is typically quite muted and we do not expect to see any changes in the short term. One concern, though, is the rising level of debt. Central government debt reached 62% of GDP in 2018, and climbed further to 65% in 2019.

Which trends have the digitalisation of banking solutions brought about in T&T?

CARTER: Product unbundling and customisation are two global trends in financial services. Customers no longer get all of their financial services from one provider; people now seek financial solutions from a range of providers. Europe – particularly the Nordic countries – is highly advanced in that regard and T&T is following suit. In a recent survey by the Banker’s Association of T&T, 49% of respondents said that they use only one bank. We can expect this rate to fall as customers take loans and are offered solutions that meet their needs, as opposed to a one-size-fits-all product. Nevertheless, T&T ultimately remains in a place where people like to meet face-to-face, and despite the rise of digital banking, local solutions must be complimentary and offer alternative channels within this framework.