New ventures to meet growing need

Gibraltar International Bank (GIB), being launched by the government to provide competition and facilities in the wake of closure of a local high street bank, has been provided with £25m initial capital.

That implies GIB has potential to lend £160m to £200m for mortgages and business borrowing before any further investment is required, assuming the personal and business loans meet immediate and extended liquidity demands on a tiered risk basis, and there is adequate security.

The move was prompted by the intended closure from October of Barclays, leaving NatWest as the only high street bank. Delays with conversion of a former Main Street discotheque into the GIB headquarters building means the Bank is unlikely now to open before early 2015. As a result, Barclays has agreed to delay its departure until January.

GIB needs its premises to be complete and operating systems fully in place before the Financial Service Commission (FSC) will grant a ‘banking licence in principle’, an administrative procedure that falls near to the end of in-depth FSC checks on the quality and independence of the Board of directors, as well as of senior staff and working processes.

Fabian Picardo, Gibraltar’s Chief Minister, revealed in June the appointment of seven independent non-executive directors, including the present Chairman of Lloyds Bank (Gibraltar), Albert Langston, and former FSC chief executive, Marcus Killick, who started the GIB licencing process before retiring in February. The others include lawyers, a businessman, and one government official, Dilip Dayaram Tirathdas, the financial secretary.

In May, Lawrence Podesta joined GIB as chief executive from being chief operating officer and deputy chief executive at Lombard Odier (Gibraltar), the Swiss-owned private bank, and Derek Sene moved to become GIB’s chief operating officer after 40 years with Barclays in Gibraltar. Several Barclays staff are expected to be offered jobs with GIB, which will provide full retail banking services.

Albert Isola, Minister for financial services, assured that “All other aspects of the new Bank including its technology platform, its management team and its systems and operations are on course to be concluded in anticipation of the building works being completed”.

It is unclear how GIB will ‘co-operate’ with, and ‘complement’ the State-owned Gibraltar Savings Bank (GSB), which intends to offer enhanced and new services, including “instant access current-account facilities for the payment of Government bills by standing order and by direct debit and facilities for the electronic transfer of funds between bank accounts.”

GSB will introduce ATM cash machines and a ‘VISA approved’ debit card, to bring about a ”transformation” this financial year as it starts to make use of the latest banking technologies, with further branches and public counter positions envisaged, Picardo noted.

GIB, unlike GSB with reserves of some £11m projected to grow to £20m by end-March 2015, is a credit institution subject to FSC licensing and regulation.