"CHAMBER OF COMMERCE WEIGHS IN ON BOH CLOSURE"
The recent announcement by the Bank of Hawaii that it is closing its local branches during the first quarter of 2013 is disappointing to say the least. It would appear to be a decision based in part on the consequences of the depressed state of our economy. Whilst it comes as a surprise to many people in the community there are others who heard that closure, withdrawal and asset sales have been on the bank’s agenda for quite some time and the bank has confirmed that it was in talks with a potential buyer earlier this year.
A US bank closing its doors in a US territory does not send a good message to potential investors in the region and certainly not to some of the neighboring Asian countries that the government has been visiting recently, soliciting their assistance to develop certain sectors of our struggling economy.
The closure suggests more unemployment at a time when the unemployment level is steadily increasing, it suggests a monopoly which is not a healthy situation for any economy, and it suggests limited access and higher costs for loan funds for local businesses and individuals for new developments that they might be planning. While these matters may not all come to pass let us hope that the government and the private sector working together can find ways that will protect the community from the more serious effects of these unpleasant issues in future.
The closure should focus the attention of the new Administration on trying to fix our flagging local economy in the short to medium term by recruiting a professional team charged with drawing up and implementing investment and development plans.
It should investigate the establishment of one or more finance companies and perhaps another bank from the mainland.
It should strengthen the capability of our Development Bank by reviewing its present operations, making sure that it is adequately funded and that it has all the appropriate terms of reference and it can operate independently as a real development bank looking after the financial needs of all our local businesses, thereby giving them a chance to expand and diversify and create new jobs for our citizens.
Both the BOH and the ANZ are in the early stages of their plans but no doubt they will ensure that the transition is as smooth as possible. Those customers who are proposing to transition are encouraged to do so immediately rather than leaving the process till just before the BOH closes its doors on 15 March 2013.
There are many matters to be considered particularly by the business community apart from the regular checking accounts and existing loans. Such matters as Merchant Services, the reliance on the debit/credit card, the continued use of credit card processing equipment and the issue of Safe Deposit Boxes should all be thought through.
Many people have access to an extensive range of services provided by BOH both here and in Hawaii and some of these may not be provided by the ANZ.
As a US Financially Regulated Institution the ANZ has most of the necessary human resources and facilities locally to cope with the transition and it has the advantage of being part of a global institution with a wealth of human resources and many years of experience in the Pacific region which can be utilized if additional assistance is required during the forthcoming months.
It has been suggested by a number of commentators that 2013 is going to be a very difficult year for our small fragile economy. The costs of doing business continue to increase, unemployment continues to rise as does inflation. We need new jobs and plenty of them to get an increased level of disposable income back into the economy.
There are no obvious bright lights at the end of our economic tunnel, let us hope that there are no more shocks to upset the commercial sector and the general community.
The prospect of one commercial institution such as a bank closing is more than enough for the community to digest. It will provide a stern test for the new Administration as it takes office and it seeks to implement and accelerate its economic development plans with one difficult year closing and the prospect of an even higher level of commercial uncertainty in the new one.
Chairman, Chamber of Commerce)