The Bank of Montserrat, the first indigenous commercial bank in the history of the island, celebrates, this year, its 25th Anniversary in business on the British Dependent Territory in the Leeward Islands sub-region. The Bank of Montserrat is a full member of the Eastern Caribbean Central Bank with headquarters in St. Kitts. Currently, it ranks in the top 50th percentile of indigenous banks in the region, and is expected to move to the top 25th percentile in two short years.
The success of the bank is due in large measure, to a variety of factors:
the vision and initiative of native sons of Alliouagana;
the power of a community's collective engagement in self-determination based on trust, confidence and resourcefulness;
a government's commitment to provide backing for local initiatives, especially in challenging circumstances; and
a sub-region's proven expertise in prudent fiscal management.
Chairman of the Board of Directors, Judge Kenneth Allen QC, asserts that The Bank of Montserrat has achieved extraordinary growth over the last two and a half decades. He announced that total deposits at the bank at the 25 year mark, is 174 million dollars with paid up capital of 6.2 million dollars.
The bank began operations on May 1, 1988, and just eight months after opening its doors, it had accumulated local savings of $3.8 million and shareholders’ equity of $870, 000. One year later, total deposits had reached $13.6 million and shareholders’ equity $1.1 million, which Mr. Allen said illustrated the tremendous confidence Montserratians had in the Bank of Montserrat. At the ten year mark, in 1998 total deposits had reached $58.9 million and paid up capital $5 million. Ten years later, after twenty years in the business, total deposits amounted to $146 million and paid up capital $5.2 million.
Mr. Allen says Montserratians everywhere had demonstrated their confidence in the bank, but the success could not have been achieved without the stakeholders, shareholders, depositors, directors, and staff. The current resident population in Montserrat is just about 5,000. However, the Diaspora population in the U.K., US.A., Canada, and the sister islands of the Caribbean is estimated to be over 12,000 - 15,000. (MNI News)
The impulse for establishing the Bank of Montserrat came in response to an appeal by UNIPOP Chancellor, Dr. J. A. George Irish to his fellow Montserratians in the Diaspora, through the Boston based Montserrat Aspirers which boasted in the 1980s a strong cadre of experienced bankers, financial analysts, managers and accountants serving in US owned banks and financial institutions.
According to Professor Hensey Fenton, the Organiser, first Chairman and first Manager of Bank of Montserrat, “The idea… the thought of Montserrat’s National Bank came from Dr. George Irish who, October 1986 as guest speaker at a Montserrat Aspirers of Boston annual dinner and dance, gave a speech on ‘the Diaspora’ in which he asked the Montserrat professionals what they were doing to support the people of Montserrat. Dr. Irish specifically challenged Montserratians in banking; he asked them if they were aware that Montserrat was the only island that did not have a national bank.” (H. Fenton)
Local Senior Accountant and Corporate Secretary of the bank, John Allen writes, "Hensey was immediately convicted by Dr. Irish’s challenge and decided to return to Montserrat to start a National bank. He spent most of 1987 going back and forth from Boston to Montserrat putting things in place to establish the Bank of Montserrat Limited. During that period he had created the Bank’s Logo, secured and designed the office space, contracted to purchase vaults and other bank equipment, and designed all forms to be used in the banks operations.
In November 1987 Lawyer John Barzey arranged for Hensey to meet a ‘dream’ group of Montserratians to whom he presented the Prospectus and asked for financial support to form Bank of Montserrat Limited. He said every member of the group committed $20,000.00 to the idea.
Having received the commitment of that group of potential investors, he put a sign offering to sell shares in the ‘Soon To Be Formed Bank of Montserrat’ in order to raise the stipulated capital to legally register a commercial bank. As if divinely inspired, Montserratians at home and abroad responded; and in May 1988, Bank of Montserrat officially started its operations.
Bank of Montserrat Limited faced real challenges from the day it opened its doors to the public. At that time in 1987, banking business on Montserrat was dominated by two successful international banks and a proliferation of off-shore banks. And in order for Bank of Montserrat to overcome the challenges and to become a success, the character of every Montserratian was being tested. The challenges were many; staffing needs, expectation for loans, loyalty, trust and the need for the constant flow of deposits would have challenged any Chief Executive Officer.
The challenges were met and Bank of Montserrat strode on. But the story was never recorded how valiant Montserrations stoutly responded to every request from Hensey Fenton for deposits to meet cash flow and foreign exchange requirements. The deposits came in the form of cheques in the tens of thousands of sterling pounds; bold customers lodged their foreign cheques into deposit accounts and yes even a trusting depositor with a million dollar cheque.
But the recorded history will show that Hurricane Hugo devastated Montserrat less than two years into the operations of the Bank and how it responded to the loan needs of Montserrations. It was mainly this response that fully tested to the core the Bank of Montserrat’s ability to maintain the East Caribbean Central Bank (ECCB) regulatory requirements for the operation of commercial banks.
The Bank of Montserrat flourished for a while, paid early dividends to entice the public so as to raise further capital; but alas, operational and managerial challenges posed renewed threats that eventually resulted in intervention by the East Caribbean Central Bank and Government of Montserrat in 1993.
This intervention heralded in a new chapter that brought changes to the Bank at Board, managerial and operational levels. In this chapter Bank of Montserrat Limited is expected to be a vital, contributor to the transformation of the region’s financial systems and economies. And it will! (J. Allen)
There is no doubt that the Bank of Montserrat will be a key player in the sustainable economic development of Montserrat, especially in view of the current port and marina development, plans for industrial and tourism development and the promising prospects for geothermal energy from the powerful volcanic resources of the resilient Emerald Isle/Alliouagana.
Fundacion Universidad Popular de Desarrollo Sostenible de Las Americas (UNIPOP) Calle 8A-E56, La Riviera de Don Bosco, Panama, Republica de Panama