Another major financial-services provider has announced it is leaving the Bahamas for the Cayman Islands.
Fortis Fund Services (Bahamas) Ltd., is part of Fortis Bank, which ranks among the top 20 European financial institutions. It currently employs 49 people in the Bahamas. It is one of several financial services institutions that have either closed or announced closure, including:
Royal Bank of Scotland
Suisse Security Bank
Lloyds Bank PLC
Credito del Peru
Banco de Credito Overseas
Mees Pierson (was taken over)
The financial-services sector employs about 4,000 people at an average salary of $40,000. And it is estimated that these closures have cost the Bahamian economy about 350 jobs. That translates into a loss of $12 million in salaries that could be multiplying through our economy.
Assuming a typical economic multiplier effect of 35%-40%, the true negative impact on the Bahamas is more like $16 million, not taking into account health and pension coverage, etc.
The Government has admitted losing more than $25 million in revenue from international business companies that relocated to other jurisdictions as a result of initiatives by the Organisation for Economic Cooperation and Development over the past few years.
If we assume that “other” services generated by IBC business contribute $50 million more to the economy, one can argue that the financial sector has lost $100 million over the past few years.
It is only a matter of time before the true effect of this loss works itself through the Bahamian economy.
What are we as a nation doing to address these problems?
Editorial, The Nassau Guardian
