Published On: Wed, Jan 24th, 2018

WIB took loss of 6 million on hurricane relief

Derek DownesPHILIPSBURG – The Windward Islands Bank has taken a loss of 6 million guilders on the grace period it extended after Hurricane Irma to private clients, WIB-director Derek Downes, chairman of the Bankers Association, said during a meeting of the finance committee of Parliament on Tuesday morning.

The WIB offered clients in good standing a grace period of six months and turned the interest rate for that period to zero.

The bank offered business clients a 3-month grace period. Downes said that the bank is prepared to extend it for an additional three months to businesses who were not, or only partially, operational after the end of the first grace period.

The WIB extended loans for close to one million guilders under a hurricane relief loan program, whereby lenders were offered loans of a maximum of $10,000 against a 4 percent interest rate.

The combined 6-month grace period for businesses ends on February 28. The bank has already started calling clients to get an idea about their situation. “It is possible to restructure the loans if necessary or even extend the payment holiday,” Downes said.

Representatives of the Scotia Bank, the Development Bank OBNA, the Banco di Caribe and Credit Mutuel also informed the committee about the measures they have taken after the hurricane to help their clients. They all offered a grade period of 3 to 4 months and these offers were extended when deemed necessary. Banco di Caribe also offered assistance to its staff members.

Answering questions from parliamentarians, Downes said that it is not possible for the Bankers Association to implement a common loan policy for all banks. “We all have different risk policies and different balance sheets,” he said.

Downes noted that, in a meeting with former Prime Minister William Marlin, he had suggested to establish a loan guarantee fund together with the government.

At the same time, Downes noted that the banks “cannot be flippant with handing out loans on the premise that this is a way to help businesses. That money is from our depositors and they expect to get that money back.”

That it is easier to get a car loan than a mortgage also has an explanation. Downes: “Property prices on St. Maarten are high”

He said that interest rates to individual clients are calculated based on their individual risk profile.

The Bankers Association chairman also addressed a question about help to entrepreneurs in the transportation sector, explaining why this is in certain situations simply not possible. “Many self-employed people do not keep the data we need as a basis for a decision. Many of them don’t file taxes, so they cannot show a tax return, and they don’t keep financial statements. If I had to suggest a general policy it would be that these clients provide the information we need. Show us how much you make and that you are able to repay the loan you are asking for.”

MP Rodolphe Samuel (NA) suggested to the Bankers Association that each member bank extend ten loans to small businesses, like the food trucks on the Pond Fill. That would be a way to get people back on their feet and create employment, Samuel said.

Downes spoke for his own bank only in his response: ‘we have already done more than that.”

Photo caption: Bankers Association chairman Derek Downes. Photo screenshot sxmparliament.org.