Issue 14 July 2004
THE NEWSLETTER FOR
N elson s Dockyard
FURTHER EXCHANGE CONTROL LIBERALISATION FOR BARBADOS
Effective June 01, 2004, commercial banks in Central Bank, approve applications to transfer
Barbados may, without the prior approval of the funds from Barbados to CARICOM countries in re-
Central Bank, approve all investment transactions spect of personal loans, maintenance and financial
in private unlisted equities in CARICOM countries assistance.
without reference to the Central Bank.
Where Authorised Dealers are not satisfied with the
Commercial banks must ask for and examine the authenticity of the transactions, such transactions
relevant supporting documentation to ensure au- must be referred to the Central Bank of Barbados.
thenticity (e.g. sale/purchase agreements, proforma
of the investment transactions, confirmation slips, The abovementioned measure is designed to con-
etc.) and to document details of the parties to the tinue the process of exchange control liberalization
investment. so as to facilitate the execution of foreign exchange
transactions in the CARICOM region.
The Central Bank reserves the right to call for
and/or inspect any such support documentation
from time to time. (Source: Central Bank of Barbados Press Release, May 28,
Also, effective June 01, 2004, commercial banks in
Barbados may, without the prior approval of the
of Indigenous Banks Inc
Every great leap forward in your life comes after you
have made a clear decision of some kind. ...Brian Tracy A leader is a dealer
Inside this issue:
CAIB M ISSION STATEMENT Caribbean Association of Indigenous
Our mission is to promote networking among
Caribbean Indigenous Banks and Financial Insti- CHAKIRO COURT CEOs Editorial Pg 3
tutions with a view to providing a range of VIDE BOUTEILLE Viewpoint - Branching Pgs
services to members to facilitate their effi- P.O. BOX CP5404
ciency, effectiveness and profitability and to Beyond Home Markets 4 - 5
CASTRIES ST LUCIA
influence policy formulation in the Caribbean,
particularly that which impacts on the practice
and conduct of banking and financial services TEL: (758) 452-2877 Pgs
Country Profile -
FAX: (758) 452-2878 6 -7
and the development of the Region. Antigua & Barbuda
The CAIB A NTHEM Bank Profiles: Pg 8
Antigua Barbuda Investment
W E STAND AS ONE Bank Ltd
W E SING AS ONE SONG
AND SHARE ONE DREAM Quote: What people can accom- Bank of Antigua Ltd Pg 9
W ITH HIGH ESTEEM plish by themselves is almost
N O DARKENED PAST CAN SHADOW OUR FUTURE nothing compared to their po-
W E SEE ONE LIGHT, A LIGHT THAT SHINES FOREVER. Global Bank of Commerce Pgs
FROM DIFFERENT PARTS WE CAME
tential when working with oth- Ltd 10 - 11
THE STORIES ALL THE SAME er s. ...Joh n C. M a x w el l Pgs
W E STAND AS ONE
Regional News Briefs
================================ 12 - 16
W E SING ONE SONG.
T h e h y p e of Ca r n i v a l Sea son 20 0 4 i n Sa i n t L u ci a i s ov er . Cost u m ed r ev el -
er s h a v e n ow a l l d on n ed t h ei r su i t s a n d ov er a l l s; a n d t h e r el en t l ess d i n
of musical bands has finally stopped. But, what a month it has been!
D u r i n g t h e m on t h of Ju l y 20 0 4 t h e Pi t on s M a n a gem en t A r ea w a s d e-
cl a r ed a W or l d H er i t a ge Si t e a n d St L u ci a s w or l d -cl a ss cr i ck et gr ou n d
a t B ea u sej ou r w a s sel ect ed a s a si t e f or p r el i m i n a r y a n d sem i f i n a l
r ou n d m a t ch es t o be p l a y ed by En gl a n d i n t h e 20 0 7 Cr i ck et W or l d Cu p .
B ot h of t h ese ev en t s w er e h er a l d ed on t h e w or l d st a ge a n d cr ea t ed n o
small stir at all levels of society in this island state.
N o d ou bt t h ese d ev el op m en t s w i l l i n cr ea se t h e i n t er n a t i on a l p r of i l e of
the Island, and increase its attractiveness to investors and visitors alike.
A t t h e l ev el of t h e CA I B , w or k con t i n u es a p a ce a s w e p r ep a r e f or ou r
A n n u a l Con f er en ce a n d ex p l or e n ew w a y s of d el i v er i n g v a l u e t o ou r
I n t h i s i ssu e of t h e N ew sl et t er , w e f ocu s on t h e i sl a n d of A n t i gu a a n d
B a r bu d a , a p r ogr essi v e Ca r i bbea n t er r i t or y w h ose m a i n econ om i c a c-
t i v i t i es a r e t ou r i sm a n d f i n a n ci a l ser v i ces. T h e CA I B i s w el l r ep r esen t ed
i n A n t i gu a a n d B a r bu d a , a s f i v e of ou r m em ber s a r e l oca t ed t h er e
three of which are featured in this issue under the Bank Profile segment.
Our Viewpoint a r t i cl e d ea l s w i t h t h e t r en d of m er ger s a n d a cqu i si t i on s
cu r r en t l y t a k i n g p l a ce i n t h e r egi on . T h e a r t i cl e B r a n ch i n g B ey on d
H om e M a r k et s w a s f i r st p u bl i sh ed i n L a t i n F i n a n ce m a ga z i n e a n d
t r a ck s t h e p r ogr ess of m a j or f i n a n ce i n st i t u t i on s i n t h e Ca r i bbea n i n -
volved in this type of activity and some of the implications.
R egi on a l N ew s B r i ef s cov er r egu l a t or y d ev el op m en t s, n ew f i n a n ci a l
p r od u ct s, r egi on a l cor p or a t e d ev el op m en t s a n d gen er a l ba n k n ew s. Ou r
a i m i s t o p r ov i d e a p a n or a m i c v i ew of t h e bu si n ess en v i r on m en t i n t h e
For those members who send us their comments on the newsletter we say
t h a n k s a n d en cou r a ge t h e ot h er s t o j oi n i n . T h i s ca n on l y r ed ou n d t o
more targeted and informative articles.
B y n ow m ost of y ou ou r m em ber s sh ou l d be a w a r e of CA I B Con f er en ce
20 0 4 d u r i n g t h e p er i od N ov em ber 14 18, 20 0 4, bu t , w e m u st r em i n d
y ou t o m a k e ea r l y a r r a n gem en t s t o be t h er e a s i t p r om i ses t o be t h e best
on e ev er . A l so a ssoci a t ed w i t h t h e Con f er en ce i s t h e p u bl i sh i n g of Ca r i b-
bea n A ccou n t 20 0 4, ou r a n n u a l p u bl i ca t i on . Ca l l or em a i l t h e CEO, M r s
Pa t r i ci a H a m i l t on , t o p l a ce a n a d i n t h i s m a ga z i n e. I n t h i s i ssu e of t h e
n ew sl et t er w e f ea t u r e ou r f i r st p a i d a d v er t i sem en t - a sp eci a l t h a n k y ou
goes out to the Institute of Canadian Bankers for taking this first step.
Remember: One ad, one cost, fifteen (15) countries
Patricia Hamilton (Mrs.)
VIEWPOINT: BRANCHING BEYOND HOME MARKETS
By Jennifer Galloway
Trinidad & Tobago is the Caribbean s financial anchor, RBTT, Republic's largest competitor at home in Trinidad,
with the region s strongest and most adventurous banks. was founded 102 years ago, but is agile and aggressive.
They have prospered from the country s economic ex- Under Chairman Peter July, the bank, which has assets
pansion over the past few years driven mainly by energy- of $1.68 billion, has also worked hard in recent years to
related activities. But opportunities at home are limited, expand and diversify its operations and build out fran-
so Trinidadian banks are expanding across the Carib- chises across the Caribbean. The RBTT Financial
bean. Group, which controls RBTT Bank, includes nine com-
mercial banks with 79 branches located throughout the
The country s two largest, Republic Bank Ltd and RBTT English-speaking Caribbean, Suriname, Aruba and the
Bank Ltd, hold 60% of bank assets. Bank penetration is Netherlands Antilles. The bank is also profitable. For the
high, with 1.5 million deposit accounts in a country of 1.3 nine months ending last September, the bank earned
million people. If we want to grow, we have to grow out- $90 million, a 47% increase over the same period a year
side of our geographical space," Ronald Harford, presi- earlier.
dent of Republic, says. "We are not likely to get much
larger market shares in the territories where we operate, Both RBTT and Republic have active investment banking
nor is it particularly desirable in terms of risk." businesses, which have arranged bond issues for Gre-
nada, St. Lucia, Belize and Dominica. According to Fitch
Republic, the larger of the two banks with assets of $2.41 Ratings, "These issues by Caribbean governments are
billion, waded into the Dominican Republic at the height reflective of both the growing stature of T&T banks as
of its banking crisis at the end of last year to pick off trou- regional financiers and the level of liquidity in the local
bled Banco Mercantil for the symbolic price of $1. The market."
Dominican Republic's banking system collapsed follow-
ing the failure of Banco Intercontinental (BanInter), the Despite their strong positions, Republic and RBTT face
country s second largest biggest bank. It crashed when a stiff competition from First Caribbean International Bank,
planned merger with Banco del Progreso unraveled which is jointly owned by Barclays Bank and Canadian
when due diligence work revealed massive fraud. International Bank of Commerce. FCIB currently lacks a
presence in Trinidad - but likely will need to establish one
The Central Bank stepped in with liquidity assistance, there to execute its pan-regional growth strategy.
increasing the money supply, fueling inflation of 43% and
driving down the value of the peso. Gross public sector Jamaica born Canadian billionaire Michael Lee-Chin's
debt exploded to 56.8% of GDP from a modest 27%. In AIC Ltd. is an important new force in Caribbean banking.
the end, the Central Bank took over BanInter, Bancredito AlC is a Canadian mutual fund company that bought
and Banco Mercantil. 76% of National Commercial Bank from the Jamaican
government in 2002. Under AlC, NCB posted its best
It will take time and lots of hard work for Republic's in- profits ever in 2003, with net profit rising 87% to $500
vestment in the Dominican Republic to pay off. The million.
country's economy is in tatters, but it is still two-and-half
times larger than that of Trinidad & Tobago. Recovery AIC now intends to expand in the Caribbean. It listed on
has begun, with a 30% increase in tourism revenues, but the Trinidad & Tobago Stock Exchange in November and
the country still depends on support from multilateral in- subsequently acquired Total Finance, a local merchant
stitutions. bank, as a launching pad for further expansion. "The re-
gion is set for growth, as is AIC, both organically and
Harford says the Mercantil acquisition positions Republic through acquisitions," says Ken King, chief executive
for growth. "We are surveying the territory and under- officer of Ale's Trinidadian operations. "And we will be
standing it. We want to be ready to move when the op- growing in both directions. We have the access to capital
portunity arises, he says. "We are not horrified by the to execute our strategy and the intellectual capital and
situation in the country. It has strong flows from tourism, infrastructure to be able to do it. And we definitely have
remittances and income from the maquiladoras. But the entrepreneurial spirit."
high oil prices are hitting the country hard, and the bank-
ing system is still reeling from the BanInter crisis. The King says Ale's entry into Trinidad & Tobago was a criti-
government of President Hipólito Mejia is discredited. cal first step. "It gives us a license with the Central Bank
VIEWPOINT: BRANCHING BEYOND HOME MARKETS
By Jennifer Galloway
to conduct banking operations and that was extremely bean economies and fears that weak bank supervision is
important in terms of being a licensed institution," he more widespread than suspected. While economists ex-
says. "It was the status we wanted to have. We needed pect Caribbean economies to accelerate this year, long-
the market to perceive us as a regulated bank, and have term sustainable growth remains a real concern. Trinidad
the ability to lend as well as to raise deposits and trade is the sole exception, thanks to rising exports, led by liq-
foreign exchange." uefied natural gas (LNG) and oil.
Caribbean financial markets remain fragile. The region's Republic's Harford says country risk poses the greatest
economies continue to depend heavily on tourism and threat to the bank's regional expansion. He plans there-
public finances have deteriorated over the last several fore to ensure solidity at home, where Republic gener-
years. Aside from the tourism business, access to foreign ates the bulk of its earnings, and grow in the Caribbean's
exchange is limited. Fitch points out that this has put stronger economies. "No matter how strong a bank is, it
pressure on local banks as asset quality deteriorated. is going to be impacted by the environment if there is not
The crisis in the Dominican Republic last year has also a market for your assets."
heightened risk awareness. Fitch reports growing con-
cern about weakening financial systems in other Carib- Source: LatinFinance, April/May 2004, No. 156, pg 45)
Join the growing number of FICB Designation holders
in the Caribbean!
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COUNTRY PROFILE: Antigua and Barbuda
black, British, Portuguese, Lebanese, Syrian. Antigua
and Barbuda s population was estimated to be 67,897
persons as at July 2003. The majority of the population
(67.4%) are within the 15-64 age group with males
(22,929 persons) slightly outnumbering females (22,845
persons). Median age is 29.1 years.
During the third quarter of 2003 economic activity in Anti-
gua and Barbuda was estimated to have increased com-
pared with the level in the third quarter of 2002. This out-
turn was largely attributed to expanded tourism activity,
reflecting growth in both stay-over visitors and cruise
ship passengers. The pace of activity in the construction
sector appeared to have slowed.
Economic activity for the first nine months of 2003 was
estimated to have been above the level of the first nine
months of 2002. The expansion was driven by an in-
Geography crease in activity in the tourism industry as a result of
growth in total visitor arrivals. Construction activity re-
Antigua and Barbuda are Caribbean islands located be- mained relatively flat.
tween the Caribbean Sea and the North Atlantic Ocean
and east-southeast of Puerto Rico. Its geographic coordi- Inflation
nates are 17 03 N, 61 48 W. Together the islands com-
prise a total land area of 443 sq km (Antigua 280 sq km; Data on consumer price movements in Antigua and Bar-
Barbuda 161 sq km). The climate is best described as buda were not available.
tropical marine with little seasonal temperature variation.
While Antigua and Barbuda have negligible natural re- Money Supply
sources, their pleasant climate and many natural harbors
and beaches make this destination an ideal tourist para-
dise. Total monetary liabilities (M2) declined by 3.6 per cent to
EC$ 1,754.4m during the third quarter of 2003 in com-
parison to the contraction of 3.1 per cent in the corre-
History sponding quarter of 2002. The decrease in monetary
liabilities was associated with a decline of 4.8 per cent in
The Siboney natives were the first to inhabit the islands quasi-money. All the components of quasi-money con-
of Antigua and Barbuda in 2400 B.C., but Arawak and tracted. Private sector time deposits decreased by 6.9
Carib Indians populated the islands when Columbus per cent compared with the decline of 3.5 per cent in the
landed on his second voyage in 1493. Early settlements third quarter of 2002. Savings deposits of the private sec-
by the Spanish and French were succeeded by the Eng- tor fell by 1.9 per cent, roughly 1.0 percentage point be-
lish who formed a colony in 1667. Slavery, established to low the rate of decline in the corresponding quarter of
run the sugar plantations on Antigua, was abolished in 2002.
1834. The islands became an independent state within
the British Commonwealth of Nations in 1981. Credit
Population During the quarter under review domestic credit fell by
5.6 per cent to EC$ 1,473.1m, in contrast to growth of
3.1 per cent recorded in the corresponding quarter of
Population growth in 2003 was estimated to be 0.64%
2002. The contraction was largely reflected in a decrease
with a net migration rate of 6.19 migrant(s)/1,000 popula-
tion. The main ethnic groups in Antigua and Barbuda are deposits.
COUNTRY PROFILE: Antigua and Barbuda
Credit to the private sector declined by 3.3 per cent to Construction
EC$ 1,465.5m, associated with reductions in lending to
businesses and households. For the period January to September 2003 construction
activity appeared to have been flat relative to the corre-
Commercial Bank Liquidity sponding period of the previous year. Public sector activ-
ity was estimated to have contracted based on a 7.5 per
Liquidity in the commercial banking sector increased dur- cent decline in central government capital expenditure.
ing the third quarter of 2003. The ratio of liquid assets to However, private sector activity appeared to have re-
total deposits plus liquid liabilities increased by 0.1 per- mained buoyant, influenced by investment in residential
centage point to 31.6 per cent, while the loans and ad- and commercial properties. Lending for home construc-
vances to deposits ratio decreased by 2.5 percentage tion and renovation increased by 4.0 per cent compared
points to 78.4 per cent. with the position at the end of December 2002.
Interest Rates Prospects
During the quarter under review interest rates at com- During the last quarter of 2003 economic activity is likely
mercial banks remained stable. The rates on savings to continue to expand compared with the performance in
deposits ranged from 3.0 per cent to 8.0 per cent. The the corresponding period of 2002. Activity in the tourism
rates offered on time deposits over three months to six industry is expected to continue its upward trend based
months ranged from 1.0 per cent to 5.0 per cent, and on anticipated increases in both stay-over visitors and
those over six months to twelve months from 1.0 per cent cruise ship passengers. Growth in stay-over visitors is
to 9.3 per cent. The maximum rate for time deposits over projected, based on an anticipated increase in the num-
one year to two years was 8.5 per cent. Prime lending ber of charter flights during the last quarter of 2003. The
rates ranged from 10.5 per cent to 11.0 per cent. number of cruise ship passengers is expected to be
above the level for the fourth quarter of 2002, based on
the cruise ship itinerary which shows an increase in
Tourism cruise calls during the fourth quarter of 2003.
For the first nine months of 2003 total visitor arrivals
grew by 6.5 per cent to 400,037 compared with the num- (Source: Eastern Caribbean Central Bank: Economic and Financial
ber in the corresponding period in 2002. This perform- Review (Dec. 2003))
ance was largely on account of a 9.6 per cent increase in
stay-over visitors to 161,889.
2004 CONFERENCE PARTICIPATING RESORT PROPERTIES Booking Early Will Guarantee Your Choice
BANK PROFILE: ANTIGUA BARBUDA INVESTMENT BANK LIMITED
"....We at Antigua Barbuda Investment Bank Ltd., opment, and customer service initiatives.
through our commitment to excellence in serving the
general public, seek to maximize the benefits accruing to As part of ABIB's strategic plan and in an effort to create
our customers, employees and shareholders." new revenue streams and reduce country risk, the
(Mission Statement) Bank's directors moved to extend beyond Antigua/
Barbuda's borders. In June 2003, we were granted a US
In 1989, a group of astute and visionary professionals operating license from the National Association of Secu-
banded together to pursue the formation of an indige- rities Dealers (NASD) in Atlanta. Consequently, ASD
nous commercial bank that would meet the needs of the Brokerage and Investment Inc. opened it doors in Coral
populace of Antigua and Barbuda. In March 1990, Anti- Gables, Florida, providing investment advisory and bro-
gua Barbuda Investment Bank Ltd. (ABIB) opened its ker/dealer services. This made ABIB the first OECS in-
doors with a staff complement of 9. stitution to venture into the US financial market. ASD is
staffed by licensed and professional individuals with
combined experience in excess of 60 years in the securi-
At a time when the financial sector was considered over- ties business.
banked, it was the feeling of some that this venture was
destined to fail. On the contrary, however, ABIB has be-
come a household name after 14 years and is now part Most recently, the Bank accepted an invitation from the
of a financial conglomerate which includes ABI Insurance Turks and Caicos government to assist in the establish-
Company Ltd., ABI Development Company Ltd., ABI ment of the first indigenous bank on the islands. ABIB
Trust (Antigua) Ltd. and Antigua Overseas Bank Ltd. will also be equity participants in this venture. The appli-
ABIB's total assets have moved from EC$22.4M in 1990 cation has been filed with the TCI regulatory authorities
to EC$487.4M as of September 30, 2003. During the and an October opening of this new bank is anticipated.
same period, we saw an increase in our staff comple-
ment from 9 to 84.
In its 14 years of operation, ABIB has achieved its goal of
In 2000, the Bank acquired Swiss American National becoming a major player in the financial sector of Anti-
Bank of Antigua, the first merger to be conducted in the gua and Barbuda, thus making a significant contribution
OECS region. As a result of this merger, ABIB doubled to the country's economy. Our sights are now set on
its asset base and became the third largest bank on the becoming a leading financial conglomerate in the OECS
island until the merger of CIBC and Barclays Bank PLC.
sub-region with significant global reach.
The acquisition also contributed to a significant growth in
our credit card base, which we continue to promote ag-
In 2001, the Bank introduced its Investment Department
whose registered Principals were among the first in the
OECS to be licensed to trade on the Eastern Caribbean
Securities Exchange (ECSE). As a licensed intermediary
of the Exchange, ABIB offers its clients access to securi-
ties available on the ECSE and the Regional Govern-
ment Securities Market (RGSM). In addition, the depart-
ment offers a wide array of investment instruments. In
2003, we introduced the Equity Linked CD which was
well received by our clients.
ABIB's commitment to the economic, social and cultural
development of Antigua & Barbuda is reflected in its four
Eastern Caribbean Central Bank awards as Best Corpo- Betty's Hope Sugar Plantation
rate Citizen and Good Corporate Citizen among commer-
cial banks in the OECS over the past two years. Areas
of recognition include educational and community devel-
BANK PROFILE: BANK OF ANTIGUA LIMITED
To provide the most friendly and efficient banking services Bank Performance:
to customers and to achieve continued growth and profit-
ability (Mission Statement) For the financial year ending December 31, 2003, the Bank real-
ized a profit of EC$2,494,449, an increase of 63.77 percent when
compared to the previous year. The decrease in net interest in-
come has been offset by the substantial increase in other income
earned, mainly gains on investments. Total assets increased by
The Bank of Antigua Limited was incorporated on February 10, 23.73 percent to EC$340,960,239, and this is most encouraging
1981 in St. John's, and opened its doors for business in Novem- in terms of growth.
ber of that year--just one day prior to Antigua's political independ-
ence from the United Kingdom. Now a member of Stanford Fi-
nancial Group, BOA is one of eight commercial banks currently Among the major contributors to this performance were the
Bank s credit card and merchant business and loans and ad-
operating in the Island.
Accompanying the Stanford acquisition of the bank in December
1990 were a recapitalization and restructuring of operations, em- Loans and Advances
phasizing increased staff training and development and a new
technology infrastructure. These investments have resulted in Loans and advances decreased by 6.5 percent when compared
flawless customer service and the ability to form relationships with the previous year s figure. Public sector borrowings reduced
with new personal and business banking clients. significantly during the year and were the main cause for this
Credit Cards and Merchant Business:
Bank of Antigua Limited comprises three branches located at
Coolidge, St Johns and Nelson s Dockyard. The Chairman of the The Bank continued to experience growth in the sales of its credit
Board is Mr. Allen Stanford and Managing Director/Secretary, Mr. cards and merchant service products.
Kenny J Byron. The staff of 65 forms the backbone of this institu-
tion and work to sustain the traditions of Antigua's unique heri-The cardholder base increased by 28.56 percent over the previ-
tage while offering an ever-growing range of banking services. ous year with correspondence growth of 37.71 percent in the
total credit line approved. Merchant turnover reflected growth of
One of the bank s main development goals for the year 2004 is to 32.55 percent. Credit card cash advances processed through
strengthen its management support staff. Emphasis has been the ATM s increased by 17.3 percent.
placed on staff training. Where necessary, complement will be
increased in the interest of providing improved customer service Capital Adequacy:
and internal controls.
As at 31 December 2003, total capital was $46,820,959, or, as a
The operational systems will continue to be reviewed to ensure percentage of assets, 13.73 percent. In relation to total deposits
that the organization benefits fully from all available technol- of $286,491,686, a solvency ratio of approximately 1:6.1 was
ogy. The developmental plans for the High Street Branch are to achieved. When measured against a prudently acceptable sol-
be revised and the new arrangements are expected to be final- vency ratio of 1:20, this gives the Bank considerable deposit
ized during the course of 2004. taking capacity in its continuing endeavour to grow.
Outstanding Achievements Corporate Citizenship
Bank on Wheels: Launched in 2002 the mobile unit is fully BOA has regularly supported the community, through the spon-
equipped to handle most customer transactions. BOA is the only sorship of neighbourhood programs, civic events and charitable
commercial bank in the nation to drive banking services directly contributions. A proud after more than twenty years of growth,
to its customers. the bank that has grown up with Antigua is looking forward to the
continued growth of its island, its people and its economy.
Online Banking: Banks customers enjoy the convenience of
secure online banking which enables them secure access to their
accounts from anywhere in the world.
QUOTE: IF YOU THINK EDUCATION IS EX-
Telephone banking: Enables customers to check balances and PEN SI V E, T R Y I GN OR A N CE .D er ek B ok
perform account transfers by phone.
BANK PROFILE: GLOBAL BANK OF COMMERCE LIMITED
Global Vision Strategic Alliances
Global Bank of Commerce embraces the vision that it can In today s global market, the non-traditional delivery chan-
provide globally competitive financial services and prod- nels are key factors shaping the financial industry. In order
ucts, regardless of its size and geographic location. The to be competitive and attractive to global clients, the Bank
Bank believes in listening to and knowing its customers has developed strategic relationships with valued technol-
and, by understanding their demands for personalized ser- ogy partners to provide core banking, payment and settle-
vice and greater customer convenience, it has invested in ment systems.
modern technologies that support relationship banking ser-
vices. In January, 2003 the Bank formed a strategic alliance with
the London Bridge Phoenix Systems, a world leader in
History/Caribbean Heritage core banking system and banking technology. The ad-
vanced and automated infrastructure of this software per-
Global Bank of Commerce (GBC) has the distinction of mits the Bank to respond to increasing transaction volumes
being the grand-father of international financial services in and customer demands without raising costs due to higher
Antigua and Barbuda, since it was the first bank formed overheads in staffing levels. A full range of account op-
following Independence in 1981 and the enactment of the tions is available including multi-currency deposits; certifi-
International Business Corporations Act in 1982. Originally cate of deposits and other competitive interest bearing ac-
owned by a Swiss financier, the shareholding was trans- counts. Most importantly, it supports a very robust internet
ferred with the approval of the regulatory authority to local and telephone banking service that offers world-wide con-
ownership under a Management Buy Out in January 2002. venience to clients.
The management team comprised the Chairman and Chief
Executive Officer, Brian Stuart-Young, Chief Operating The Bank also invested in establishing a new regional
Officer, Vere Hill, and Chief Financial Officer, Chris Wil- company known as V2R Financial Services which offers
liams, formed an Antiguan company, Executive Corporate services to Caribbean financial institutions. The company,
Holding Inc., which purchased 100% of the shares in the managed by the well known Caribbean banker David
institution. McConney, assists banks to obtain or have access to best
of breed banking technology at competitive costs, and sup-
Major Developmental Accomplishments ports management to focus their energies on further im-
proving service quality and products to customers. This
Jurisdiction Initiatives company also worked with CAIB to establish and maintain
its current web-site.
As a locally owned and operated entity, the institution was
re-branded under the Global Bank of Commerce image In keeping with its vision to achieve global competitive-
with a greater focus on providing technology-driven finan- ness, the Bank established a partnership relationship with
cial and commercial services within a global environment. an international remittance business operated on the Inter-
The transition was timely as the role of international bank- net to provide service in the Eastern Caribbean and to its
ing from Caribbean jurisdictions had been changing in international clients. It is a secure and powerful payment
keeping with international demands from authorities includ- platform which operates under strong compliance stan-
ing the OECD, FATF, IMF and the requirements of the dards to facilitate person to person transfers on the Bank s
USA PATRIOT ACT. Visa Electronic stored value card that can be reloaded and
is multifunctional. This is the first prepaid debit card to be
Antigua s regulatory infrastructure, including its legislation introduced by any Caribbean financial institution and it can
to prevent money laundering and terrorism-funding and be used at any Visa point-of sale, ATM or internet mer-
exchange tax information, was strengthened to ensure the chant.
jurisdiction met all international standards. GBC was well
positioned to comply with these standards and the en-
hanced scrutiny on international banking as it had earlier
introduced internal policies to govern the controls to meet
to international standards. These initiatives assisted the In addition to our strategic partnerships, the Bank has
bank to establish new correspondent and strategic relation- strengthened its internal systems by the introduction of
ships under its Caribbean ownership and business vision. new policies, procedures and programs such as Quality
BANK PROFILE: GLOBAL BANK OF COMMERCE LIMITED
Assurance and Marketing programs. More recently it intro- Corporate Achievements
duced the formation of committees to effectively manage
the various risks facing the bank and for re-engineering old
A major achievement has been the expansion of space
processes to meet the new demands of the customer.
normally employed by institutions to include service oppor-
tunities driven by related entities, or which provide financial
Money Laundering Prevention and Counter-Terrorism products that are normally outside of the core business of
Policy most banks. In addition to the earlier mentioned invest-
ments and initiatives, the Bank s thrust has been towards
In 2000 prior to the 9/11 tragedy and the subsequent scru- establishing secure facilities for electronic commerce and
tiny on correspondent relations, the Bank s management the delivery of various types of electronic benefits for con-
had initiated an external audit by PricewaterhouseCoopers sumers, companies and governments.
of its anti-money laundering policies and controls. This
process established protocols well ahead of the existing Staff and Corporate Citizenship
banking requirements and created the birth of a compli-
ance culture that would serve the bank well into the future.
The Bank is managed by an international team of profes-
sional executives with extensive experience in private
The Bank also became the first Eastern Caribbean bank to banking, investment and international financial services
employ anti-money laundering software by Americas Soft- (including electronic payment systems). The full compli-
ware, which provides enhanced monitoring of all bank cus- ment comprises thirty-four employees, occupying approxi-
tomers and transactions including automatic OFAC re- mately 5000 square feet of office space.
views. The Bank carries a full compliance department
which subscribes to Lexis-Nexus, World Compliance and
multiple search engines to establish best practices in Management and staff have a proud heritage of serving
knowing the Bank s customers. the local community and actively participating in the pro-
motion of culture, sports, and the performing arts. Its con-
tributions extend to both civic and charitable organizations.
Both the Bank s Chairman and it Money Laundering and
Compliance Officer became certified members of the As-
sociation of Certified Anti-Money Laundering Specialists For a number of years, the Bank has provided sponsorship
(ACAMS) in 2003. According to ACAMS, Brian Stuart- of a local cricket team, Global Bank s Precision Edge
Young is the only Chairman of a financial institution world- which enjoys a good performance record in local competi-
wide to be certified and he has been recognised as leading tions. It is the proud sponsor of Ali and Associates
a top-down approach to encourage a strong compliance School s Mas Troupe which facilitates school troupes par-
culture and risk management training. ticipating in the annual Antigua carnival celebrations and
supports Antigua s annual Sailing Week and other tourism
Financial Performance events and publications along with donations to other enti-
ties such as the Institute for the aged and the general hos-
Under Caribbean ownership the challenges facing the
Bank s international financial services were tackled with
A member of S.W.I.F.T. and a Principal Member of Visa
West Indian style. First, the traditional core business was
International and MasterCard International since 1992,
enhanced by investing more broadly in Caribbean busi-
as Issuer and Acquirer. The Bank is also a member of the
nesses and government issued instruments so that cur-
Caribbean Association of Indigenous Banks (CAIB), the
rently more than 72% assets are Caribbean based. Its
Antigua Barbuda Chamber of Commerce, and the Antigua
other source of revenue is loans which comprise 10% of its
Barbuda Hotel and Tourism Association.
deposit liabilities. With prudent management of its spreads
and administrative costs the Bank has been able to pro-
vide an average of 10% annual return to our shareholders. The Bank strongly believes that an important measure of
its success is its constant commitment to giving back to
the community and to supporting faith-based organisa-
For the year ended December 2003, the bank reported
total assets of US$82,884,079 and return on equity of
10%. Global Bank of Commerce has been recognized as a
model bank in its proactive approach to the regulatory Quote: Who has a why to live can bear al-
standards as outlined in the new Basel Accord. m ost a n y h ow .. ...Friedrich Nietzsche
REGIONAL NEWS BRIEFS
CAYMAN ISLANDS: Cayman National Launches Its Master Series Funds
Cayman National introduces its Master Series funds to Fund s allocation of assets to each underlying fund will
potential investors in the Cayman Islands. The Master vary depending on the performance of each underlying
Series features the choice and flexibility of investing infund and market conditions. Investors can move their
the Dow Jones Industrial Average Index Fund and the allocation of resources between the two funds. The Mas-
Absolute Return Fund. ter Series has the potential of assisting investors in build-
ing their wealth and meeting their personal financial
The Dow Jones Industrial Average Index Fund is seen to goals.
have a moderate risk rating more suitable for the asser-
tive investor. This fund s objective is to track the Dow Cayman National s objective in providing its customers
Jones Industrial Average, a price weighted average of the opportunity to invest in its Master Series Funds is to
thirty significant stocks traded on the New York Stock provide support in getting investors closer to their finan-
Exchange, and is fitting for the confident investor who cial goals faster. Parents saving for their children s col-
can appreciate its fluctuating performance. Current hold- lege funds or individuals looking for investments to meet
ings within this fund include Proctor and Gamble Co., 3M their retirement goals are able to choose the fund that
Co., Caterpillar Inc., American Express and Johnson & best suits their partiality to risk.
Johnson, to name a few in the top ten.
Cayman National is making strides to offer flexible and
A more conservative investor may prefer the Absolute low management cost investment vehicles through the
Return Fund. The Absolute Return Fund operates under Master Series as part of its increasing range of products
the premise of making investments into several funds offered to customers. The minimum initial investment in
with established performance. These funds typically con- the Master Series is US$5,000 with subsequent contribu-
sist of hedge funds, where the investment manager, may tions being US$500.
for example, make use of two or more securities that are
likely to move in opposition to each other. This strategy (Source: http://www.caymannational.com/pubs/CNMSTLaunch-
is intended to diminish the risk that would exist if only PressRelease-2004June.pdf)
one of the securities was held. The Absolute Return
JAMAICA: The First Global Brand Expands To Meet Customer Needs
The recent announcement of the merger of companies To allow for the offering of these services, FGFS has
within Grace, Kennedy s Financial Services division to acquired the operations of the following Grace, Kennedy
form First Global Financial Services, is the completion of subsidiaries: FGB Securities Limited; First Global Stock-
plans first announced in November 2003 to consolidate brokers Limited; Grace Kennedy Properties Limited; First
services within the division to achieve greater customer Global Insurance Limited; Grace Pension Management
satisfaction, operational efficiencies and cost savings. Limited and Global Capital Services Limited.
The consolidation exercise saw George and Branday As of July 12, 2004 the' new address for First Global Fi-
Securities Limited being renamed First Global Financial nancial Services will be 2 St Lucia Avenue, while First
Services (FGFS), on April 1, 2004. Simultaneously, Global Bank will remain at its current address at 28-48
George and Brandy Merchant Bank Limited merged its Barbados Avenue.
operations into First Global Bank (FGB) - a 100% Grace
Kennedy owned commercial bank. Wayne Wray, former managing director of George &
Branday Limited, is the President of First Global Bank,
FGFS is effectively the non-deposit-taking arm of the while Sandra Shirley heads First Global Financial Ser-
First Global organization and offers a comprehensive vices.
range of investment management and advisory services,
as well as securities trading in fixed income and equities. (Source: First Global Bank Limited: www.firstglobal-bank.com )
REGIONAL NEWS BRIEFS
JAMAICA: Income Diversification, Tax-Free Bonds Drive JMMB s Net Profit
Net profit reported by Jamaica Money Market Brokers assets came from resale agreements - up from J$8.2 bil-
(JMMB) jumped by 49 per cent to J$1.54 billion for the 13- lion to J$18 billion - creating a sizeable asset class from
month period to March 31 this year - the favourable outturn which the institution earns margin by simply acting as a
largely driven by strong contribution from associate compa- broker for clients wishing to park their funds in government
nies, and a tax-efficient asset structure. paper.
JMMB group reported net income of J$1.04 billion for the Gains from this type of trading jumped from J$484.9 million
12 months to February 28, 2003, and J$1.54 billion for the to J$857 million. The big jump in margin from this activity
13 months to March 31 this year, when the company also due in part to new international accounting standards
changed its year-end to conform with that used by other which require financial companies to fully reflect current
members of the group. During its 13-month operation, the investment values on their P&L.
money market pioneer earned J$9.25 billion in interest in-
come, up from J$5.99 billion the previous 12-month period. For JMMB there was no downside in applying this new rule
because of the very favourable effective tax rate it now
Based on these numbers, JMMB's profit could have been enjoys. However, Duncan acknowledges that with the in-
far more spectacular but for the sudden and dramatic up- terest rates having fallen by nearly half to the present low
swing in interest rates a few months ahead of the start of teens, it would be challenging for JMMB to maintain such
the company's financial year. That sudden surge in rates phenomenal growth in this revenue stream.
sent JMMB's margins into the red, particularly during the
first three months of the year under review - with the recov- "The gains won't be as significant as it used to be," he
ery coming during the two latter quarters. said, "but the portfolio has grown so large that the sheer
size will compensate for reduction in the margin." Revenue
Though interest income for the 13 months under review, at from a host of other income-generating activities, like for-
J$938 million, was up 23 per cent on the J$761.2 million of eign exchange trading, funds management, promissory
the previous 12 months, it was not reflective of the impres- notes, fell to J$195 million during the 13 months, from
sive growth in gross revenue. J$275 million.
Keith Duncan, JMMB's deputy managing director, told the Net interest income and other revenues amounted to
J$1.99 billion, up J$469 million or 30.8 per cent from
Business Observer that the subsequent fall in interest rates
created "some level of compensation" during the latter twoJ$1.52 billion the previous year. Against this background,
quarters of the financial year. the increase in staff costs by J$106.6 million to J$482 mil-
lion or by 28 per cent was well below the growth in income.
The increase in other operating costs was even more mod-
For the 13-month review period, JMMB was able to net 10
cents in interest income from every dollar in gross earn- erate - by J$61 million or 13 per cent to J$519 million -
ings. This compared with the previous year when it demonstrating the positive impact that critical mass is hav-
squeezed 12.7 cents from each dollar in gross interest. ing on the performance of this institution.
The upshot is that operating profit was up by J$302 million
"Our interest margin was compressed," noted Duncan.
"There was some level of compensation when it came or 44 per cent during the 13-month period over the previ-
down. With the stability in the rates we can now maintain ous 12 months. But JMMB's ultimate profitability continues
to be driven by other investment decisions taken by its
our net interest margin."
management team led by managing director Donna Dun-
can, and Keith Duncan.
The expectation therefore is that JMMB's future net interest
income should more accurately reflect its growing asset
For example, as part of its strategy of country and product
and revenue base.
diversification, JMMB in August 2000 acquired 45 per cent
interest in Caribbean Money Market Brokers (CMMB) in
But JMMB, its asset base having jumped from J$48.9 bil- Trinidad and Tobago. Later, in April 2002, CCMB started a
lion to J$61.2 billion, also made a strategic asset realloca- stockbrokerage - CMMB Securities Ltd.
tion to strengthen its risk profile. The bulk of the increase in
Cont d on page 14
REGIONAL NEWS BRIEFS
JAMAICA: Income Diversification, Tax-Free Bonds Drive JMMB s Net Profit (Cont d from page 13)
Income from these investments contributed J$527 million net income amounted to J$1.547 billion, J$509 million or
to JMMB's profit during the review period - up from J$243 49 per cent above the previous 12 months.
million the previous years. JMMB's pre-taxation profit
therefore jumped from J$934 million to J$1.52 billion. What's important, according to Duncan, is that most of
these tax-free bonds do not mature until 2011, which
The associate company in the twin-island republic now has means that JMMB will be able to enjoy very favourable tax
assets of TT$5 billion (over J$30 billion). Significantly, rate for several more years.
JMMB, not unlike other companies in Jamaica, has also
been reaping significant tax relief from having invested in At balance sheet date, JMMB had shareholder equity of
the Jamaican government's long term non-taxable bonds. just over J$4 billion.
The approach taken by these financial institutions in allo- (Source: Jamaica Observer, Wednesday, July 07, 2004)
cating costs against their various revenue streams in their
P&L, allow them to earn profit, not just without having to
pay income tax, but in some instances, to be in a position
to claim tax losses. JMMB was able to claim tax losses Quote: Perseverance is not a long race; it is
during the review year (J$28.5 million) and the previous many short races one after an-
financial year (J$103.6 million).
The upshot is that net profit in both financial periods ex-
ceeded gross profit. For the 13 months to March 31, 2004,
JAMAICA: JMMB Wants 20% Of Barbados Money Market
Jamaica Money Market Brokers says it expects its associ- branches in Jamaica this year - one in May Pen, Claren-
ate company in Barbados to grab between 10 and 20 per don and the other in Brown's Town, St Ann.
cent of the island's US$1-billion fixed-income market within
a short period. JMMB now has three branches in Kingston, one in Ocho
Rios which was opened three years ago, and one each in
Caribbean Money Market Brokers (Barbados), in which Portmore, Mandeville and Montego Bay. It has 200 em-
JMMB owns 50 per cent, began operation in June - the ployees. "We are stepping up on the value chain," says
acquisition being in line with the objective of the Jamaican Duncan. "What we are offering is a full financial planning
company to expand into the region. The full service broker- service."
age house - which offers stocks, fixed-income investment,
and money market funds - is the only one of it kind in Bar- Duncan says that JMMB's moves to acquire a small com-
bados, according to Keith Duncan, deputy managing direc- mercial/merchant bank in Trinidad and Tobago - Intercom-
tor of JMMB. mercial Bank Ltd - was part of the organisation's drive to
create a total financial services operation. JMMB, having
JMMB owns a total of 50 per cent of the Barbados broker- completed its due diligence of the bank, expects to secure
age house through its 45 per cent ownership of Caribbean regulatory approval shortly.
Money Market Brokers in Trinidad & Tobago. That T&T
firm in turn owns 90 per cent of the Barbados outfit, with For the year to March 31, 2004 JMMb reported net group
JMMB owning directly, the other 10 per cent. profit of J$1.54 billion - over J$500 million of which was
contributed by its associate in T&T. At March 31, 2004 it
Duncan told the Business Observer that the Barbados bro- had total assets of J$61.2 billion.
kerage was capitalised to the tune of US$5 million. It oper-
ates with six employees out of rented space in the capital,
Bridgetown. The investment in Barbados is part of the ex- (Source: Jamaica Observer Wednesday, July 14, 2004)
pansion drive by JMMB which also plans to open two
REGIONAL NEWS BRIEFS
JAMAICA: Capital & Credit Acquires Majority Unit Trust Shares
The Capital & Credit Financial Group (CCFG), comprising For his part, Deputy Group President/President & CEO of
Capital & Credit Holdings Ltd. and Capital & Credit Mer- Capital & Credit Merchant Bank, Curtis Martin, welcomed
chant Bank Ltd., has been successful in its bid to purchase the acquisition, pointing to the extensive income generat-
the 92.73% shareholding in the Jamaica Unit Trust Ser- ing potential it holds.
vices Ltd. (JUTS) controlled by the Government of
Jamaica . He added that the Bank's goal will be to bring to the JUTS
a higher level of efficiency by integrating various opera-
Announcement of the successful bid was made May 31, tions of the Unit Trust with that of the Capital & Credit Fi-
2004 by the Chairman of the Capital & Credit Financial nancial Group and so achieve cost savings with even
Group (CCFG), Ryland T. Campbell, following confirmation greater wealth creation opportunities for the investing pub-
received under letter from the Financial Institutions Ser- lic.
vices Limited late Friday afternoon (May 28, 2004).
Mr. Martin notes further that the acquisition of the Jamaica
Mr. Campbell notes that the acquisition of the JUTS will Unit Trust Services Ltd will satisfy the Organizations objec-
add a new dimension to the range of products and ser- tives in its Caribvision 2010 , by providing investment op-
vices, which the Capital & Credit Financial Group will now portunities for people across the Caribbean and by so do-
offer its customers and provide a significant increase in the ing widen that customer base; widen the Group's menu
Group's customer base as the Jamaica Unit Trust Services base of product offering; provide risk diversification and
Ltd. currently has approximately15-thousand accounts increase its fee-based income. In short, the acquisition,
covering customers across the island with approximately he says, is well aligned to our current business model.
$1.5 billion in Assets Under Management as at June 2003.
The CCFG Chairman says further that the three funds now Customers across the island, Mr. Martin says, will be ser-
being operated by the Jamaica Unit Trust The Income viced through a mix of channel distribution. The Capital &
and Growth Fund; The Capital Growth Fund and The Gilt Credit Financial Group was one of six firms which had ten-
Edge Fund will be added to the Group's range of product dered proposals for Government's majority share of the
offering and are excellent vehicles for building wealth for Jamaica Unit Trust. The official take-over is set to be final-
investors who neither have the time nor the expertise to ised very soon, at which time the appropriate announce-
evaluate investment options. ments will be made.
The Unit Trust, Mr. Campbell says, is ideally suited for (Source: http://www.capital-credit.com/corp_news_room.php3)
the individual investors, who can benefit from higher re-
turns through the pooling of their funds.
SAINT LUCIA:Bank of Saint Lucia Sponsors LOGOS II
You can give a man fish and feed him for a day, or you munity service initiatives. Logos II carries a stock of half a
can choose to teach him to fish and feed him for life, said million books, covering a wide range of subjects. The ship
Bank of St Lucia s Baldwin Taylor, when he presented a is scheduled to leave St Lucia on July 20.
EC$9,000 donation to the captain of the MV Logos ll last
week Taylor believes the bank s sponsorship is an opportunity
to provide people with additional tools that can be used to
Taylor, the bank s marketing PRO explained that through improve skills they have acquired.
the student loan program, the bank has given many St
Lucians the opportunity to feed themselves. Captain Dirk Colen Brander expressed his delight at the
contribution. He said the money will help, not only to con-
Logos II, commonly referred to as the floating book fair, is tinue the book-fair, but to spread the Good News of Jesus.
now docked at Point Seraphine. The ship s crew and pro-
grams promote international understanding and worldwide (Source: The St Lucia Star, Wednesday, July 7, 2004)
education through cultural exchange programs and com-
REGIONAL NEWS BRIEFS
SURINAME: Suriname s Economy Could Lure Wall Street
NEW YORK, July 21 (Reuters) - Two Wall Street credit- rates even smaller," Kalinina added. "The official rate is
rating agencies rated Suriname for the first time this year, also almost the same as the maximum legal exchange rate
citing the former Dutch colony's fight against inflation and used by commercial banks at Sr$2.78," she added.
the launch of the first post-colonial currency for the tiny
South American country's improving investment prospects. The ceiling for the non-official rate was eliminated in early
June. Since the implementation of tighter fiscal and mone-
Fitch and Moody's rated the Republic of Suriname, the tary policies, the illegal market exchange rate has appreci-
former Dutch Guiana, ahead of a possible first-time issu- ated, virtually eliminating it, Fitch's Fredel said.
ance of international bonds. Standard & Poor's started rat-
ing the country four years ago. However, there is one more rate -- for the import of baby
milk products -- at about Sr$2.0 per dollar, subsidized by
Fitch gave Suriname a B rating, while Moody's gave it a the government.
B1. S&P rates it B-, in the same category as countries
such as Venezuela and Uruguay. Political, economic and Ready for investment?
fiscal policies have created a stable market, allowing
Suriname, bordering the Atlantic Ocean between French
Suriname to replace its devalued currency and create an Guiana and Guyana, is self-sufficient in oil and vegetable
environment for foreign investment, the agencies said. But foodstuffs for its population of almost 500,000. The econ-
maintaining those policies are challenges ahead of next omy is based on mining, mainly of bauxite and gold, with
year's election. ample reserves of oil and lumber.
"Our rating was related to the possibility of the issuing of Foreign direct investment is rising for the first time since
international bonds, but whether they are going to do that the 1990s. But to attract Wall Street, analysts say Suri-
or not I don't know," said Steven Hess, vice president and name will need to maintain stable inflation, combine all
senior credit officer at Moody's Investors Service. exchange rates and elect a government that is able to hold
on to long-term macroeconomic reforms. They are waiting
"They have a government that is serious about fiscal sta- to see if the current market policies will stay in place after
bility and controlling inflation. That is a big change from the this year s election.
past. Now the question is, 'How long will that last?'" Hess
(Reporting by Manuela Badawy; Editing by Dan Grebler; Reuters
Messaging: firstname.lastname@example.org; Tel+1 646
President Ronald Venetiaan has managed to correct sig- 223 6055)
nificant fiscal slippage created by his own administration
and inherited from the previous government. After creating QUOTES:
a fiscal deficit of 7 percent of gross domestic product in
2002 by raising public salaries, the government was able APPRECIATE PEOPLE. NOTHING GIVES
to boost tax revenues, freeze public-sector wages and MORE JOY THAN APPRECIATION......Ruth
control non-wage expenses, resulting in a fiscal surplus in Smeltzer
WHAT IS POWERFUL IS WHEN WHAT YOU
"Suriname's different exchange rates are a reflection of an
underdeveloped and inefficient financial system and the SAY IS JUST THE TIP OF THE ICEBERG OF
inability of the central bank to have market forces properly WHAT YOU KNOW......Jim Rohn
aligned and converge all the exchange rates," said Olga
Kalinina, associate of sovereign ratings at Standard &
Poor's. SUCCESS AND FAILURE ARE AN INSIDE
GAME. TRANSFORM YOUR THINKING AND
As of January 2004, the official rate was moved from YOU TRANSFORM YOUR WORLD.....James A.
Sr$2.65 <SRD => to Sr$2.77 per U.S. dollar, making the Ray
difference between the parallel market rate and official