Lolo calls BoH closure devastating to territory
Governor-elect Lolo Matalasi Moliga has described as “devastating” and “very sad” Bank of Hawai’i’s plans to close down its two branches in American Samoa early next year, leaving only one bank to serve the banking needs of the territory.
BoH announced in a statement late Friday the closure of its local operation sometime “late in the first quarter of 2013”, which means sometime in March of the new year. The news prompted concerns from local residents, including the private sector, as to the impact it will have in the territory once BoH closes down.
Reached by telephone after 5 p.m. Friday, Lolo said the proposed closure of BoH locally is a “very sad situation” and this move by the Honolulu-based financial institution is “going to be devastating to American Samoa.”
But he added, “we need to find a way to intervene so they will not leave, and try to get to the bottom of the serious issues faced by the bank as to their reason for closing down. If it's local policies, we can work on addressing those issues.”
Hobbs Lowson, vice president and district manager for BoH in American Samoa, said in the BoH statement last Friday that the bank in 2000 made the decision to "centralize its footprint back to our core Hawaii and Guam markets, but opted to also keep a presence in American Samoa, where we felt we could deliver the appropriate level of service.”
“However, it’s become increasingly difficult to maintain that strategy in American Samoa due to its geographic isolation from our other markets,” he said and noted that the bank is working with local government officials and ANZ Amerika Samoa Bank... to help ensure customers’ banking needs continue to be met. (See Saturday’s edition for full details of the bank’s statement.)
Responding to separate inquiries, Lowson told Samoa News last Friday evening that acting governor Fepuleai A. Ripley Jr. was informed of the bank’s decision during a meeting and BoH customers are being sent “notification letters” from Honolulu about the closure.
Lowson, however, declined to reveal the bank’s total number of customers in the territory, citing bank policy.
Gov. Togiola Tulafono is enroute to the territory — arriving tonight from Honolulu — following off island meetings with officials of the Taiwanese government in Taipei. It's unclear at this point if the governor will have a chance to meet today with BoH officials in Hawai’i before heading home.
As of yesterday afternoon, there was no official statement from the Togiola Administration over BoH’s decision.
Lolo, the former president of the Development Bank of American Samoa, did point out that the two local banks are faced with financial difficulties in the territory, due to a 'not so good' local economy, which has affected everyone. He further noted the weak global economic crisis.
Concerning the plan for BoH's closure, Samoa News asked Lolo if his incoming administration will seek to attract another U.S. bank to enter the local market. Lolo said he cannot comment on this issue at this time “until we get to the bottom of the real situation and problems encountered by the bank.”
Lolo said, “I hope there is something to be done to convince BoH to remain here for a very long time, but again, we must find out from the bank some of the issues they faced.”
Responding to Samoa News requests for comments about the bank’s plans, local Chamber of Commerce chairman David Robinson said that before the Chamber puts out an official statement, members of the executive board need to meet with BoH and ANZ management “so we understand the plans for the way ahead.”
“Obviously this a great disappointment, and perhaps a reflection, and the consequences, of the depressed state of our economy,” Robinson said over the weekend.
This latest blow to the local economy with the BoH closure is expected to be raised during Wednesday's Chamber general membership meeting.
In February of last year, the bank closed its Pavaiai branch, leaving only the main branch in Utulei and the second one at the Tafuna Industrial Park. Customers and staff at Pavaiai were consolidated with the other two branches.
The Utulei branch is located inside the Centennial Building, which is owned by the ASG Retirement Fund, who will lose a major tenant as the bank occupies the entire first floor.
BoH holds ASG’s general fund account, which is the same account that is in the middle of the garnishment legal battle at the federal court in Honolulu and the subject of two ASG lawsuits against the bank in the High Court of American Samoa.
(Read story on update of the legal battle in this issue)