How smart is the Bank of Nova Scotia?

Jun 09, 2016 Features / Columnists, Freddie Kissoon

I took up a complaint from a customer of the Bank of Nova Scotia. In the process, I stepped on an interesting behavioural pattern of this bank in Guyana. Before we proceed, it needs to be said that the bank’s global operations are suffering serious profits decline. In November last year, it announced the removal of 1500 jobs of which the majority was in Canada and closed 120 branches, mostly in Mexico and the Caribbean. Two branches were closed in Jamaica.
The bank is finding it tough in Guyana. It has introduced two changes to earn some small cash. One of them is obnoxious. First, it charges $500 to encash a cheque once the recipient does not hold a Nova Scotia account. I contacted Republic Bank and GBTI and they said they do not practise such a policy. The second one was announced a few months ago.
All saving accounts below one million Guyana dollars will now attract a service charge of $1000 monthly. It means yearly you would be paying the bank $12,000. I don’t know if this is a violation of the Bank of Guyana regulations. But I could see people saying that small savers have a choice; take your pittance elsewhere. It is commonsense to do that and you save $12,000 a year.
Here is what I discovered about the Bank of Nova Scotia. It has one property that it owns in Carmichael Street. It rents its Head Office on Robb Street paying Demerara Group of Companies (insurance company), millions each month. The Human Resource Officer, Ms. Das, said she cannot give me the figure as a matter of policy. She suggested I speak to the Marketing Manager, Jennifer Cipriani.
Several attempts to get her failed. I spoke to Mr. Jeffrey Brewster, the CEO of Demerara Companies. He indicated that I am seeking confidential information. I did ask him if the Nova Scotia rent is listed in the annual report to the policy-holders but he declined to answer.
I did not get a specific figure but from picking up bits of information, the rent is millions monthly. What is intriguing to know is that the Demerara Group of Companies has recouped the cost to build its huge structure which takes in part of Robb Street, part of Regent Street, part of Avenue of the Republic through the hundreds of millions of dollars in monthly rent from Nova Scotia and to a lesser extent from Caribbean Airlines over the years. It was a super investment
I enquired about the sense in such a business policy. Scotia officials said the bank cannot be bothered with maintenance if it had built its own Head Office. It takes away from its corporate work. I was told at the end of the day managers will be preoccupied with seeing leaking roof repaired, windows fixed, hanging electrical wires to be redone etc. I must say that such an attitude is nonsense. Demerara Bank just built a huge head office on Camp Street. It owns it. GBTI owns its majestic edifice by the Kingston seawall. The spectacular buildings of Republic Bank at Camp and Robb Streets and on New Market Streets are owned by the bank itself.
The nonsensical approach of the Bank of Nova Scotia becomes more exasperating when you think of the fact that they own a large structure on Carmichael Street. What is wrong with building another? What businesses abroad do, is that they make a monthly payment to a maintenance company. Once there is a leaking roof, a call is made, and the crews come and fix the stuff. This is what Scotia should have done. Build your building and employ a maintenance crew. This is a win-win situation because you own the structure and your staff doesn’t have to bother with leaking roof because the money you pay for renting the office, is the money you will pay to the maintenance company
The simple fact of the matter is that Scotia is the only local bank in Georgetown that rents its Head Office from another company. There is an impressive bank going up on Camp Street and South Road, built by Citizen’s Bank. Instead of charging people to encash a cheque or demanding small savers pay the bank to keep their money there, Scotia should stop paying Demerara Group of Companies millions of dollars a month as if they have money to throw away. Something is not right in the arrangement with the insurance company and this bank.

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One thought on “How smart is the Bank of Nova Scotia?”

Investor June 10, 2016 at 8:43 am

Only Freddie. Do some research on buy vs. lease options.

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