By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister has blasted a government-owned bank for cutting branch hours in his constituency and further pushing Family Island communities “down this path of neglect”.

Leon Lundy, hitting out in his capacity as South and Central Andros MP, said Bank of The Bahamas’ decision to slash operating hours at its Kemp’s Bay branch to just one day per week - while leaving its Mangrove Cay location open four days per week - makes no obvious sense given that the former serves the larger population.

Describing the move by Bank of The Bahamas, which is 84 percent majority-owned by the Government via a combination of the Public Treasury and National Insurance Board (NIB), as a “disservice” to Bahamians still reliant on branch banking, he added that it was another example of how Family Islands and their communities are “treated as an afterthought” by the commercial banking sector and others.

And Mr Lundy, who is minister of state in the Prime Minister’s Office, in urging Bank of The Bahamas’ Board and management to “rethink” the move also called for this nation to adopt a new banking “model” based on greater competition. This would involve permitting more Bahamians with the capability to do so to obtain a commercial banking licence.

Neil Strachan, Bank of The Bahamas’ managing director, in a messaged reply to Tribune Business inquiries, sent a note - seemingly sent by the bank’s management to its staff - where it asserted it “remains committed” to serving clients in both the Family Islands and New Providence.

However, Bank of The Bahamas conceded that “service and delivery channels may be impacted due to operational matters”, citing South Andros in particular. “The bank continues to explore ways to meet customer needs while prioritising both efficiency and sustainability,” the BISX-listed institution said.

Yet Mr Lundy, in his capacity as South Andros and Mangrove Cay MP, voiced “deep frustration and disappointment” over changes that Bank of The Bahamas said will take effect from May 5, 2025. The Kemp’s Bay branch will now only offer “limited services” between 10am and 2pm on Wednesdays to deal with in-branch deposits and withdrawals that exceed the $2,000 automated teller machine (ATM) limit.

Mangrove Cay, by contrast, will be open four days per week apart from Wednesday, with Bank of The Bahamas clearly joining its rivals in seeking to drive clients to online banking. “Customers are required to use our convenient and secure digital platforms,” the bank said in unveiling the changes.

Mr Lundy, though, questioned the rationale for the changes given that Kemp’s Bay, whose branch will only be open one day per week, “serves the larger and more populous area of South Andros”. He added: “This disparity highlights a serious disconnect between decision-makers and the realities on the ground.

“This is not just an inconvenience; it is a disservice to the hard-working people of South Andros. Time and time again, we see financial institutions making decisions purely from a business perspective with little to no regard for the real human impact on our island communities.

“Banking is not a luxury; it is an essential service that underpins every day life - from running small businesses to simply being able to access one’s own funds,” Mr Lundy continued. “For too long Family Island communities have been treated as an after-thought. 

“This latest move is yet another stark reminder that much of our banking system is Nassau-centric without enough consideration for those who live and work beyond New Providence. I firmly believe the time has come for us to rethink the model.

“We must encourage and open the way for Bahamian individuals and corporations - especially those who truly understand and value life in the Family Islands - to establish financial institutions that genuinely serve and support those communities. Our people deserve better.”

Obtaining a commercial banking licence, though, is no easy task given the capital and regulatory hurdles that must be overcome to obtain one from the Central Bank of The Bahamas. Such a task has been made much harder in recent decades by the onslaught of global financial services regulations impacting The Bahamas and other international financial centres (IFCs).

Still, Mr Lundy urged: “I call upon regulators and private sector leaders to treat this matter with the urgency and seriousness it deserves. South Andros and Mangrove Cay are vibrant, growing communities whose residents deserve the same access to essential services as anyone living in the capital.

“We cannot, and we must not, continue down this path of neglect. I ask the decision-makers at the Bank of The Bahamas to rethink this decision.” However, the decline in Family Island physical bank branch locations and service provision is far from a new trend as institutions seek to slash costs, eliminate unprofitable locations and drive their clients to increasingly use digital and electronic banking channels.

John Rolle, the Central Bank’s governor, revealed previously that the number of bank branches in Grand Bahama and the Family Islands shrank by almost 40 percent in the seven years to 2021. Data showed the scale of the commercial banking industry’s retreat from physical presence operations, with branch numbers declining from 86 in 2014 (and 88 in 2008) to just 61 then - a reduction of some 25 locations.

The decline was more pronounced in Grand Bahama and the Family Islands, where there was an-almost 40 percent fall-off in bank branch locations from 38 in 2014 to 23 at that time. As for New Providence, bank locations dropped by just over 20 percent or ten over the same period to reach 38.

The branch network shrinkage has largely been driven by the commercial banks - especially those that are Canadian-owned - seeking to exit unprofitable, costly island markets that they deem too small and expensive to maintain amid the push for Bahamians to increasingly use digital banking channels.

Some institutions left Automated Teller Machines (ATMs) as a substitute for physical branch presence, while many residents have also relied on the web shops to transfer monies. Electronic payments providers such as Sun Cash, Omni Financial Services and Island Pay have been eyed as the replacement for physical bank branches, as well as the Bahamian digital dollar, the Sand Dollar, and agency banking.

Bank of The Bahamas’ Mr Strachan, meanwhile, told this newspaper yesterday that the temporary closure of Bank of The Bahamas’ Inagua branch with effect from last Friday had been caused by staff shortages. While “several employees are out due to vacation, during their absence several others became ill”, he explained.