Find Banking and Financial Services expertise in Barbados
The domestic banking sector in Barbados is sound and profitable, dominating the financial system. The sector has benefited from strong economic expansion, which aided credit demand while contributing to a steady improvement in banks’ asset quality. The onshore banking sector in Barbados grew rapidly in the 2000s. For example, assets grew from US$3.1 billion in 2002 to US$5 billion in 2007, which was equivalent at the time to about 142% of GDP. During the 1990s and 2000s investment provided a significant part of the impetus for growth in GDP. During these years the financial sector has also experienced significant changes, including mergers, acquisitions and resulting disappearance of indigenous banks, along with the introduction of new regulations and legislation. Commercial banks in Barbados are considered highly developed financial intermediaries. They include Scotiabank , Butterfield Bank, FirstCaribbean International Bank, Citicorp Merchant Bank, Barbados National Bank Inc and RBC Royal Bank of Canada (2011). Commercial banks concentrate most of their operations on consumer banking and real estate (mortgage lending). There are currently around 50 offshore banks; however, there is considerable asset concentration among just a few of the banks (2010). The four largest offshore banks belong to Canadian financial conglomerates and in all 17 banks represent 75% of the system’s assets (2007). In total, Canadian companies make up approximately 75% of the international financial community in Barbados.
Regulation of Financial Services
The Central Bank of Barbados is responsible for regulating the safety and soundness of the financial system. The World Economic Forum’s Global Competitiveness Report (2012-13) reflected Barbados’ strong and healthy financial sector in placing it 10th in the world (out of 144 countries) for the soundness of its banks. The Bank Supervision Department is in charge of regulating and supervising commercial banks, merchant banks, trust and finance companies and international (offshore) banks licensed in Barbados. The regulatory arm of the Central Bank aims to develop legislation and regulations for the financial system, inspect financial institutions licensed under the Financial Institutions Act and the Offshore Banking Act, and report on the performance and condition of each licensed financial institution. Both onsite and offsite inspections of all licensed financial institutions are held regularly, usually within a two-year cycle, although some institutions have more frequent visits as part of efforts to strengthen the quality of operations.
Development of Financial Services
The World Economic Forum Global Competitiveness Report (2012-2013) gave Barbados a strong score for availability of financial services where it was ranked 39th and for affordability 51st out of 144 countries. In relation to ease of financing through local equity market Barbados was rated 91st, and for ease of access to loans it placed 79th in the world. As of 2008 a continuation of exchange control liberalisation and greater flexibility in the interest rate regime were two aspects of a general trend towards greater reliance on market forces in the financial sector.