UBS Bahamas Limited is "winding down" the banking side of its operations over the next year, but maintains it is not leaving The Bahamas and is committed to doing business here, according to UBS Head of Latin America and the Caribbean Gabriel Castello.
Guardian Business has learned the process could take anywhere from nine to 12 months, but it will not impact the trust side of the business.
The bank's local board made the decision early Thursday morning. Castello revealed yesterday that the bank "tried everything" it could to position The Bahamas as an alternative banking center for its Latin American clients.
He said the decision to phase out the banking operations comes after four years of regular assessments on the jurisdiction.
"When it came to The Bahamas, we found three areas that raised three question marks for us: Value proposition, economics and operational complexity," he explained during an interview with Guardian Business at UBS' East Bay Street offices.
"I can tell you that I tried everything. Frankly speaking, it didn't fly. We were not able to find the right value proposition to attract assets to be booked in The Bahamas out of the different Latin American countries.
"The market is pushing us to consider when its comes to the offshore business, Latin America, they continue to think about the U.S., Switzerland, eventually Panama but to lesser degree in The Bahamas.
I think that was one of the main reasons that the group executive board had some questions about the future of UBS Bahamas."
Company executives have said they plan to meet individually with all employees working on the bank side to explain the move and no decision has been made as yet to the number of redundancies.
Beat Paoletto, UBS Bahamas' managing director & CEO told Guardian Business that it plans to offer those affected employees an alternative within the organization to the extent possible. Once that process is complete, executives are expected to call their clients.
In fact, that process could take months before it is done. "The plans to expand the trust business will work in parallel to the winding down of our banking operations.
[But] I must say the process of communication is happening right now. And that will happen until everyone knows what is happening and what would that mean for them as an individual," he pointed out.
"We look at The Bahamas no longer as a banking center but I would describe more as a service center. This is where The Bahamas has the beauty of having an attractive value proposition.
We are going to continue to invest in our trust company. But the focus of our strategy is changing in The Bahamas from a bank center to a service center."
It was unclear yesterday exactly how many UBS employees would be impacted. Currently, UBS' local branch services hundreds of clients, with a special emphasis placed on the Latin American market.
UBS Bahamas Limited has been operating in The Bahamas since the 1968 and officials say they remained committed to this jurisdiction.
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