AS early as 1964, the then-minister of finance had announced that one of the tasks facing the government following Independence was the establishment of an indigenous commercial bank owned and operated by the citizens of Trinidad and Tobago.
The events of 1970 underscored the importance for the government to proceed more expeditiously with the setting up of a bank. By then it became the policy of government to disallow any foreign banks from establishing investments in Trinidad and Tobago.
Around the same time, the Bank of London and Montreal (BOLAM) had succumbed to the pressures of the events of 1970 and had decided to close its doors to local banking. Back then the company consisted of two branches, one in Port of Spain and the other in San Fernando.
BOLAM then went up for sale and the government swiftly acquired the two ready-made branches for $1.4 million. The new government-owned banking entity was then called the National Commercial Bank of Trinidad and Tobago (NCB).
On July 1, 1970, the Port of Spain branch opened its doors to the public with an authorised capital of $15 million and paid-up capital of $5 million.
In opening the new bank, Prime Minister Dr Eric Williams hailed the move as an important milestone in the history of banking in Trinidad and Tobago, as an occasion for pride, happiness and dedication to the achievement of the goals and aspirations of the nation, following the achievement of Independence eight years before.
In his opening remarks, he said, "On March 24, 1970, I had announced the starting of negotiations with the Bank of London and Montreal, for the purchase by government of that bank's operations in Trinidad and Tobago. The negotiations were conducted in an atmosphere of cordiality and friendliness and agreement was reached on a price that was promptly paid by government before the date."
In emphasising the integrity of the deal with BOLAM, he said, "We are not buying a major bank. It has, it is true, a location on Bankers Row and this is valuable. So far, however, the bank has just under two per cent of the banking business in Trinidad and Tobago. It is our aim, our duty, to convert this into a vibrant financial giant geared to the development needs of the country, of the existing business community, of prospective investors, industrialist, farmer or trader. This is your opportunity. Seize it with both hands."
One banking analyst had argued that the government had not gone far enough by its failure to set up the appropriate support mechanisms. "The bank was set up with no special charter which would allow for the provision of financial services tailored to the peculiar needs of the country. Instead the bank was expected to compete with other foreign banks which had the backing and experience of their parent's banks," said the commentator.
In that same year, the Seamen and Waterfront Workers' Trade Union had made a proposal for the establishment of a Workers' Bank. The members of the union felt the capital could be made available from the receipt of severance payments which they had received from the Port Authority.
"Instead of spending the payments on consumables", the money could be used in the establishment of the bank, the workers said.
Following discussions with the government, legislation was passed in Parliament to provide for special privileges and concessions to the new Workers' Bank of Trinidad and Tobago. The Workers' Bank Act 32 of 1971 set up the bank as a limited liability company with an authorised share capital of $9 million. Some $6 million was reserved for unions and staff associations, and the remaining $3 million was shared between the municipalities and statutory authorities of government.
Under the direction of its first management, the National Commercial Bank recorded a pre-tax profit in its first two years of $208,567 and $355,925, while the Workers' Bank recorded a loss of $485,574 and $214,454.
It was clear then that there was need for either a rationalisation or merger of the three local banking institutions to improve their performances.
In September 1993, the Central Bank of Trinidad and Tobago merged the three government-owned entities, National Commercial Bank, the Trinidad Cooperative Bank (TCB) and the Workers' Bank to form First Citizens Bank.
For the financial year ended September 2011, First Citizens showed profit after tax of $718.2 million, while the group's asset base increased from $29.5 billion to $31.2 billion, in spite of the deceleration in the local economy.
Standard and Poor's and Moody's also reaffirmed First Citizens' investment grade ratings of BBB+/A2 and Baal/A1, respectively.
There was no doubt that the complex financial institutions in the country were strengthened by the opening of the National Commercial Bank, the Workers' Bank and the Cooperative Bank, which together represented the fruition of an idea that dated back to the 19th century when a call was made for the establishment of a people's bank.
Since Independence, the National Commercial Bank, renamed First Citizens Bank, now First Citizens, has played a meaningful role in the development of Trinidad and Tobago.