CNMI banks say their operations and financial status remain stable amid the multi-million scandal involving Bank of Saipan, the pending closure of Hong Kong and Shanghai Banking Corp. and the heavy withdrawals at City Trust Bank on Friday.
Bank of Hawaii, BankPacific, First Hawaiian Bank, City Trust Bank, Bank of Guam, HSBC—in separate statements and interviews—said the CNMI banking industry remains “sound.” They encouraged consumers and the government to continue doing business with them.
Ronald H. Leach, executive vice president of Bank of Hawaii’s West Pacific Banking Division, said their Saipan branches are “strong, stable and growing.”
He said Bank of Hawaii is insured by the Federal Deposit Insurance Corp., and has total assets in excess of $10 billion. As of April 30, 2002, the bank enjoyed market equity capitalization of over $2 billion.
In a letter to Gov. Juan N. Babauta, Leach said Bank of Hawaii is the largest deposit bank in the CNMI with total deposits in excess of $150 million—as reported by the Bankers Association last December.
Bank of Hawaii’s Garapan and Susupe branches maintain government deposits amounting to $3.5 million.
“Bank of Hawaii is ready and able to serve the commonwealth in many ways during this time of financial stress,” Leach told the governor.
Maggie Deleon Guerrero, office supervisor of BankPacific’s Saipan branch, said the bank continues to operate in a secure manner, and has never experienced any massive withdrawals of deposits.
“In fact, our officials on Guam will be coming up with announcements telling our clients that they should not fear or worry about their accounts with us. We are FDIC-insured, and definitely we’re not going down,” Deleon Guerrero told Variety.
Lulu Johnson, assistant vice president and acting manager of City Trust Bank, said it is “business as usual” at the bank. (See related story)
“Although we’re as affected as other banks because of the Bank of Saipan issue, we are still stable,” said Johnson.
Francisco S. Ada, First Hawaiian Bank’s service supervisor at the Gualo Rai branch, said the bank continues to operate normally.
Acting Gov. Diego T. Benavente on Friday said local bank clients “continue to receive normal services” even though some banks had to mobilize “extra resources” to accommodate requests for new accounts and withdrawals.
Benavente said the closure of HSBC “no way reflects” any loss of confidence in the local banking industry.
“I am told that HSBC had its best quarter ever on Saipan. Unfortunately, losses on Guam caused the corporate decision to pull out of the entire Marianas,” Benavente said.
“Based on everything that I have heard today, I believe that the banking industry in the CNMI as a whole is sound,” Benavente said after meeting with banking industry officials Friday.
The Retirement Fund during its board meeting on Thursday said it would assist retirees and pensioners whose checks were affected by the Bank of Saipan fiasco.
Fund General Counsel Kathleen Troy-Rucker told reporters on Friday afternoon that they were encouraging retirees with accounts in the beleaguered bank to call the Fund.
According to Troy-Rucker, there is less than a hundred of pensioners whose retirement checks are channeled through the bank.
She said several individuals have already sought the Fund’s assistance.
“What the Retirement Fund is going to do is make sure they receive the April pension payment, because we do know that some of those funds may have already been deposited at Bank of Saipan and they do not have access to that,” Troy-Rucker said.
However, the Fund cannot assist retirees who want to withdraw their savings at the bank because of the freeze order on all its assets, she said.
“What we will do is issue a check to them in an amount equal to the pension payment that we have distributed for the end of April because we know these people have bills to pay,” Troy-Rucker said.
The Fund’s operation is “not affected,” she added.
