fp Turks and Caicos

International Banking Group TCI Ltd. has closed its retail banking operations in the Turks and Caicos Islands but ensures all depositors that they will be paid out in full.

“Although the bank will not be open for new business, it is open and operational for the withdrawal and transfer of funds,” IBG Vice President of Human Resources Dr. Kellie-Ann Evans-Hall told the fp. “We would emphasis that the situation is not like that which occurred with TCI Bank where the bank closed its doors — our customers are being invited to close off their accounts, and the bank will remain open for normal business hours whilst this is achieved.”

TCI Bank was forced into liquidation in April 2012 because of bad loans and management problems, the Financial Services Commission (FSC) concluded. Depositors are still waiting to get back a fraction of their deposits, and shareholders lost their investments.

“In the original business plan for IBG we predicted that the new bank, which opened its doors in 2010, would be loss-making for the initial period of trading, but various unique events have conspired against the success of the new bank,” IBG said in a statement Aug. 14.

“These included the world-wide economic crisis, the impact of the failure of TCI Bank and the uncertainty that the constitutional crisis in the Turks and Caicos Islands generated. As a result, and despite measures to reduce costs, IBG has found it difficult to develop new business, and ongoing losses have far exceeded original expectations.”

The U.K. suspended parts of the Constitution and took direct control of TCI government in August 2009 after a Commission of Inquiry found evidence of government corruption that has led to criminal charges against former government ministers, developers and others.

His Excellency the Gov. Ric Todd said IBG decided to wind down retail operations after consultation with the FSC, but he said the decision did not mean commercial banking in the TCI is in trouble.

“The International Banking Group is a relatively small operator which holds few deposits and has a low number of loans on its books,” Todd said. “The closure of IBG, while regrettable, is a commercial decision by the bank. It is not a reflection of low confidence in the TCI economy.”

IBG is a subsidiary of Cayman National, which owns a majority of shares in the bank, although 30 percent of the shares were offered locally.
The governor said IBG would be contacting local shareholders about their investments, and the bank will seek to sell its loans to another commercial lender.

“We would add that for practical reasons we will continue to provide merchant services and some credit card facilities,” IBG said.