The higher skill requirements of the international banking sector versus the more labour intensive skills required by domestic banking translates to employees in the international sector making an average of 58 per cent more than their domestic counterparts.
According to a survey of the “Gross Economic Contribution of The Financial Sector in The Bahamas for 2003” compiled by the Central Bank, a salary comparison of the two sectors revealed that the international banking sector in the country saw employees in this area averaging yearly increases of 5.6 per cent, while domestic counterparts saw a mere 3 per cent. The report placed average salaries within the international sector at $63,773 compared to $40,379 for domestic banking employees in 2003.
The report placed overall compensation among bank employees in the financial services sector at $46,203 a 2.8 per cent increase over 2002. Breaking down the salary components further, the Central Bank placed the average salary of Bahamian workers at $42,137 for 2003, a 1.2 per cent increase over the previous year. Expatriate salaries however were estimated by the report at $117,120 ﾖ a 13.6 per cent increase over 2002.
Overall employment for the sector showed a 5.7 per cent reduction in 2003 with most of the shrinkage occurring among Bahamian workers. This reduction is a stark contrast to the sustained annual job growth experienced by the sector during the previous five-year period from 1998 t0 2002. The Central Bank also reported some reductions in expatriate employment by some 6.4 per cent. Total banking sector employment fell by 6.2 per cent a negligible difference to the 6.3 per cent for 2002.
Although the new financial services regime legislation introduced in 2000 and the requirement by the Central Bank in 2001 for all managed banks in the jurisdiction to establish a physical presence led to a reduction in the number of banks. This trend is beginning to reverse itself with an increase of banks maintaining stand-alone presence in The Bahamas increasing to 216 from 203 in 2002 the report said.
The Central Bank is predicting that this figure could increase even further with an additional 29 banks in the transition stages of establishing physical presence.
According to the Central Bank, once these 29 banks become fully established, The Bahamas will boast the largest number ever of banks with a physical presence and place the sector in an overall stronger position to generate future employment.
The predictions in the Central Bank report echoed remarks made by the Central Bank governor, Julian Francis in early May at a luncheon presentation hosted by the Bahamas Institute of Financial Services who described the necessary changes made by the Central Bank in 2001 as having potential long term benefits for the financial services industry.
Hitting back at naysayers who described the changes instituted by the Central Bank as a setback for the industry, Mr Francis said in this presentation that the changes had the ability to propel the jurisdiction to a higher level in the world of financial services.
Martella Matthews, The Nassau Guardian
