…next stop: East Coast of Demerara
The Demerara Bank Limited yesterday opened its new Head Office and branch at Diamond on the East Bank of Demerara, and will be the first bank to grace the East Coast of Demerara, answering the call of President Bharrat Jagdeo who believes that there is scope for such an expansion. The new building will function as both head office and branch, relieving the Georgetown Head Office of some duties and assuming some of the staff. The president was happy that the bank exercised prudence in spending to finance the building of the branch at Diamond, noting that the other banks opened in the community some weeks ago were of a higher cost. Demerara Bank built its 15,000-square foot Diamond branch at a cost of $460M. The bank, which is a part of the Demerara Distillers Limited Group of Companies, will offer exclusive services for corporate clients.
“Everyone on the East Bank will benefit from the services [of the bank],” President Jagdeo said, adding that he hoped it would mean an expansion of business opportunities along the East Bank corridor.
He spoke of Diamond/Grove becoming part of the urbanised network linked to Georgetown as the East Bank corridor continues to develop in the coming months. He said that the government is working with at least 10 developers on this urbanisation, but he cautioned that land for cane cultivation should not be sacrificed for this. He said that by mid-2012 there would be made available 15,000 new house lots along the East Bank corridor.
“This is a good business decision [to come here],” said President Jagdeo, lauding the Board and management for their confidence in the burgeoning housing drive. “I am very pleased that Demerara Bank has decided to go to the East Coast,” he said, noting that the entire corridor is unserved by a financial institution, even though its population’s spending power is significant. “The disposable income on the East Coast is huge,” he said, adding that the bank’s early entrance to that market will see many benefits.
According to the president, the growth in the banking sector is significant and with this, one could only conclude that it is good to be in banking in Guyana. He said that this success in the banking sector speaks to the nature of the market in Guyana for banking services.
He made the point that no matter how efficient a bank is, if there is no market for its services, and no favourable environment, it cannot prosper.
The President said that banks in Guyana must forge a new philosophy, which recognises that the money in the bank belongs to the depositors, and in that way ensuring that it is safeguarded, making Guyana a more favourable destination for financial services.
“We encourage a healthy financial sector. We want shareholders to make money, but from time to time you will see the hand of the regulator,” he said.
The president noted also that while the spread between depositors’ interest rate and borrowing interest rate remains high, it has come down significantly from past years.
Speaking at the opening of the branch, CEO of Demerara Bank, Pravinchandra Dave, said that this marks the fourth branch of the institution. “We will be very soon opening a branch on the East Coast,” he said.
He said that government has made major efforts to improve the infrastructure, allowing the proliferation of the sector. “Now, it is for the bank and industry to make use of this infrastructure,” he said.
He noted that all of the commercial banks in Guyana were well capitalised, and noted that the Capital Adequacy Ratio indicated this. However, he said that the challenge is to mobilise people’s savings and utilise it for development of the country.
Dave pointed out that the bank is lending money and taking care of its obligations, as demonstrated by the Credit Deposit Ratio for the bank – 38 – 39 percent. He said that the average ratio for all banks put together come up to 29 – 30 percent. “If you look at rates of deposit, we offer higher rate of deposit…higher than the other commercial banks in Guyana,” Dave said. “Our bank stands for four things – trust, confidentiality, service and security,” he said. “These are the pillars of our banks, and unless we stick to those pillars, we will not be able to develop or sustain development,” he said.