|The Bahamas Investor Magazine
December 8, 2010
December 8, 2010
Paul McWeeney, managing director of the country’s largest full-service commercial bank, Bank of The Bahamas International Ltd, has come a long way from humble beginnings growing up as the youngest of eight children in a modest home in downtown Nassau.
McWeeney’s vision for the bank has been fundamental in its development and has helped it garner many accolades along the way, becoming the first bank in the jurisdiction’s history to win the prestigious Bracken Award, presented by The Banker, a member of the Financial Times Group, and three-time winner of the Euromoney Award for Excellence in 2006, 2008, and 2009.
In addition, the bank executive was named Bahamas Financial Services Board Executive of the Year in 2006; is the Honorary Consul for the Dominican Republic; vice president of The Bahamas Institute of Bankers; an international member of the Young Presidents’ Organization; chairman of St Augustine’s College, a local private high school; and, if that wasn’t enough, he is also married to a former Miss Bahamas. Not bad for a boy who was on academic probation at age 10 because his grades were so poor.
“At the beginning, I’m ashamed to say, I just didn’t take school very seriously,” says the 49-year-old bank chief. “I was the youngest of eight children, and we are close knit, so I was always looked after–you know, the baby of the family. It wasn’t until I was a bit older that I started to take education more seriously. If you had told me then that I would sit as the chairman of St Augustine’s College [my alma mater] one day, I would have just laughed.”
The young McWeeney did eventually buckle down to his studies, however, becoming an honour roll student, and choosing to do a college degree in hotel management. By 18, he had a job at a hotel, his own car, his own apartment and was enjoying a “carefree” lifestyle.
Around this time his twin brother, the eldest of the two, was involved in a car accident on Abaco. Complications from a broken leg led to a long debilitating illness that would eventually, some 20 years later, claim his life. It was at the time of his brother’s accident, McWeeney says, that his attitude to his own life changed dramatically. “My brother had always been the serious one, the leader, and I had felt protected. When he had his accident and got ill, we had to exchange roles, and really that is when I started to become the person that I am today.”
Change of direction
He realized then that his choice of career did not suit him, and when a friend suggested he should apply for a position at Chase Manhattan Corp (now JP Morgan Chase), the 20-year-old took the opportunity, joining the US institution in 1981.
His new-found sense of responsibility helped spur an ambition to succeed, and within three years he was excelling in his role at the bank. Recognizing his potential, Chase sent him on an all expenses paid training secondment to Puerto Rico to complete a Harvard-based, nine-month intensive course, the equivalent of an MBA in finance and accounting. “They paid for everything, probably around $75,000 in total,” McWeeney remembers. “But the catch was that if you failed any part of the course, you were sent home and you lost your job. That was quite an incentive to do well.”
After passing the course, he was asked to stay in Puerto Rico for a further six months to develop a capital lease programme for the commercial market.
Once back in Nassau, he quickly ascended in the ranks at the bank to become vice president in 1989. Following postings in numerous branches overseas, and despite offers from “several leading international banks,” McWeeney felt it was time to return home for good, joining Bank of The Bahamas as senior credit manager in 1993 on the advice of John Kenning, the former head of Barclays Finance Corp and then Bank of The Bahamas chairman.
Worth the risk
Despite Kenning’s assurances, it was still a risky career move. At that time, the bank was still in its infancy and had an unenviable reputation. “When I joined, many people didn’t even accept Bank of The Bahamas’ cheques,” recalls McWeeney. “Everyone told me not to come here, because it was a government bank, and it was losing money. The future of the job wasn’t secure. The bank could have easily failed. But I liked Kenning, and what he offered was the ability to make change on your own.”
Working with the veteran banker and management team, McWeeney helped develop a business strategy for the bank and it started to grow. Within three years he was promoted to deputy managing director, and the bank was becoming recognized as a major player in the domestic marketplace.
At the start of the new millennium, McWeeney became the youngest managing director of a clearing bank in The Bahamas, at the age of 39. It was also the year he married his wife and former beauty queen Meka–the owner of authentic Bahamian arts and crafts store La Casita–who he had met just after returning to Nassau.
Capital is king
Since joining Bank of The Bahamas, McWeeney has grown it in line with prudential international banking standards, increasing its capital from $18 million to $120 million–an average growth of around $10 million each year. Now the bank’s risk to capital ratio is around 20-25 per cent, well above that of The Central Bank of The Bahamas’ required 14-17 per cent.
“Ten years ago I set out an objective to grow the bank’s capital. I thought that it was important to foreshadow the risk of the bank becoming more complex in tandem with the industry. That has proven to be the best thing to have done, so the bank is well fortified to stand economic shocks. Our stress testing suggests that the capital is adequate for what we can expect in the near term.”
Despite the banking crisis of the last 18 months, Bank of The Bahamas has remained profitable, generating a net income of $7.7 million for the year to June 30, 2010, exceeding internal profit projections by $1.5 million. Total revenues increased by 6.4 per cent year-on-year, with new loan growth last year of around 13 per cent.
The bank now employs around 350 people and has had two successful public offerings, which saw it broaden its ownership, although the government remains the majority shareholder. It has reported total assets of $778 million, up some $20 million from 2009 and more than $200 million from 2006. It is a fully diversified institution, with commercial banking accounting for around 40 per cent of its book of business and retail about 60 per cent, predominantly residential mortgages. It also has a private banking and trust business, and three years ago opened a satellite office in Coral Gables, Florida.
McWeeney attributes the bank’s success to having the right people on-board. “It is true that great people make great institutions and we sought to get the best qualified and most respectable people on our staff.”
But no matter how talented the employees, there has to be an ethos in place that allows them to thrive. “We set out to empower them, so that they could utilize their own innate, and learned, abilities for the benefit of the bank,” continues McWeeney, who counts growing and developing his management team as one of the most rewarding parts of his job. “Some people are better at being told what to do, but we look for people who like to create and communicate their own ideas. And that works in our favour, because people see working here as a chance to be unencumbered. Consequently, we have talented and committed staff.”
Above all else, he says, it comes down to the personal touch. “We achieve results through being human. You have to have solid, grounded human values, because if you have those, you will make fair and proper decisions, which are key to developing credibility.”
McWeeney says his background has a lot to do with how he approaches his work and his vision for the bank’s development. Son of a Catholic missionary, William Thomas McWeeney Jr, and a thrift store owner, Thelma Victoria McWeeney née Cox, his father was a strict disciplinarian and devout in his beliefs. “We even had an altar in the house,” says McWeeney. “All of us would line up at eight o’clock every morning to pray.”
McWeeney remains a strong Catholic, and his experiences growing up have led him to live by a few simple values that he applies to his management technique at the bank. “Like I learned when I was a boy, we are here to help one another, for the goodwill of mankind. I tell people when they come to work here that they have to hang up their egos at the door and be fundamentally respectful to one another. There is also no room for failure; we have to be bigger than the problems we face. These are the core values of the institution.”
Leading the industry
Building on this foundation, McWeeney is now concentrating on taking the bank to the next level. “I would like to see the bank as an industry leader within the next 10 years–being a financial enterprise with good global recognition.”
To achieve this, the bank executive is propounding a simple strategy: make banking more affordable, flexible and secure. “The future of banking is convenience and security,” he opines. “The days of huge bricks and mortar structures are over. There will be more kiosk banking stations being developed, as we use less cash and trade more using debit and credit cards in this country. Our services will be more diversified, more retail oriented in how we deliver financial services.”
On the domestic front, the bank has a reputation of introducing innovative products to market, such as online banking and the jurisdiction’s first domestic trust, driving change in the commercial banking sector. Now, the managing director also sees growth opportunities in the private banking arm of the institution, particularly targeting new wealth in emerging economies.
“We are looking to align our services with the growth of countries such as Brazil, Russia, India and China. Offshore banking is probably the easiest option, and we will look to have some private banking offices that can work directly with them or have alliances with firms in those countries. You could see a whole change in the bank as regards how we approach international business in the next five years.”
This change, he hopes, will happen in tandem with a paradigm shift in the jurisdiction as a whole, with increased fortitude at both the political and the grass roots level. “We need a 10-year national initiative, one the whole country can get behind; one that is indifferent to political agendas. We need to be more nationalistic in the way we grow and develop this country, and we have to understand the global implications,” he says. “Every Bahamian should have a desire to assist the development of the country. It is important to become part of committees or groupings and help the government develop strategies. I would like to see the bank taking a broader role in the development of the country. We can restructure the company to get the maximum benefit for the betterment of the population, by, for example, simplifying the way we offer credit and looking at new ways of financing.”
As for his personal role in the process, McWeeney rejects the idea of going into politics, but suggests that his tenure as bank head will last another ten years at least and that he would still like to remain involved beyond that time. “I was planning to retire sooner, but now
I have another child on the way, so my personal circumstances have changed a little,” says the father of two, whose third is due in April. “But I think it is important to know when to step aside and take a backseat. I have four or five excellent managers here that could run the bank. What is important is to ensure there is a good succession at executive level to secure the bank’s future.”