BANKS AND THE WIDENING WEALTH GAP

REPUBLIC Bank’s profits have soared from $664 million in 2004 to $1.2 billion in 2014 to $2 billion in the just-ended financial year.

The most recent profit – in the midst of a declining economy – was 14.6 per cent higher than the previous year.

Each local financial institution has seen profits gallop over recent years, although not as sharply as that of Republic.

The annual profits of local commercial banks are growing faster than the international average of 4.92 per cent.

Certain banks are publicly traded, but institutions and elite executives are the major shareholders.

In many countries – England, for example – there have been sluggish growth in bank profits since the Covid-19 crisis.

T&T’s banks stand out for their rocketing profitability.

During the pandemic, the Bank of England (Central Bank) directed banks to reduce charges to businesses and households through interest rates, mortgages, funding for small and medium enterprises (SMEs), overdrafts, loans, credit cards and other measures.

In Trinidad and Tobago, clients received token support, and the authorities did not put pressure on banks.

While banks enjoyed a reduction in the reserve requirement, they were asked by Finance Minister Colm Imbert only to “assist affected individuals to cope with the financial difficulties caused by the Covid-19 pandemic.”

An estimated 6,000 small local businesses went belly-up when the pandemic ended, unable to replenish stock, pay workers and rent, service loans and undertake marketing.

While SMEs were closed, one supermarket chain ventured into several typically small business activities, such as bakery, stationery, meat shop, florist etc.

For years, local banks have been roundly criticised for steep and pervasive fees.

Prime Minister Dr. Keith Rowley has refused to intervene, saying the current taxation on the industry was “the best action.”

Three years ago, Barbados’ Prime Minister Mia Mottley blasted banks for high charges, and threatened to legislate on the matter.

Barbadian bank bosses and the Central Bank rushed to the table to negotiate reduced rates and fees.

Local banks are at the heart of the inequitable distribution of foreign exchange, which has led to a flourishing black market and is threatening the viability of thousands of vulnerable small businesses.

Some directors and senior executives in the banking sector are key operatives in business corporations, which enjoy the biggest slice of the forex pie.

The banks’ rising profits are taking place amid growing poverty, with a majority of the working class living from pay cheque to pay cheque.

One in three meets the indicators of deprivation, unable to afford basic needs.

Banks aside, business monopolies are being set up – pharmaceutical imports, for example – effectively setting take-it-or-leave-it prices for hard-pressed consumers.

The annual importation of food – operated by a tightly-knitted cartel – has escalated from $4 billion in 2015 to $7.3 billion, while 7,000 acres of arable lands remain idle.

In the midst of those circumstances, the largest fast food chain has reported annual revenues of $1.3 billion – 16 per cent hike from the previous year.

Health Minister Terrence Deyalsingh (who is also fighting to save his political career) had dropped his campaign for the fast food industry to serve healthy meals to reduce obesity and diabetes levels.

“Corporate greed” is a major cause of inflation in a land in which the prices of food basics have jumped by 65 per cent over the past decade.

Public officers were handed a four per cent wage increase for the period.

With the shutdown of SMEs, the flight of our professionals (including Petrotrin engineers), and people escaping crime, T&T is fast losing its essential middle class.

More and more, there are two detached nations within these twin islands – filthy rich and privileged elites and deprived common people struggling to make a living.

And no one is lifting to fix a country burdened by profiteers and poverty.