The “inherent resilience” of Gibraltar’s economy enabled NatWest Gibraltar to register “a good level of growth” last year despite uncertainty in the lead-up to Brexit, Andrew McLaughlin, the chief executive of parent group Royal Bank of Scotland International [RBSI], said yesterday.
Mr McLaughlin was speaking as RBSI reported group-wide pre-tax operating profit of £336m in 2018, its 22nd consecutive of positive results that included a 53% year-on-year increase in income.
RBSI did not issue a detailed breakdown of its results for each of the jurisdictions where it operates, but its chief executive said Gibraltar had performed well.
“If we’re able to continue to be profitable and to grow in Gibraltar, it’s because our customers are doing interesting things, they’re investing and growing themselves,” he told the Chronicle.
“So that’s very encouraging.”
Mr McLaughlin said the Gibraltar Government’s handling of Brexit-related issues had been “incredibly impressive”, helping to maintain confidence in the local economy.
He nonetheless acknowledged the continued doubts as to how Brexit would ultimately unfold, adding that RBSI – “like everyone else” – hoped common sense would prevail to avoid “some of the more extreme outcomes” that would be damaging not just for Gibraltar but the UK too.
He would not be drawn to comment on moves by other banks such as Denmark’s Jyske Bank and the UK-based Lloyds Bank to pull out of Gibraltar, but said NatWest Gibraltar’s business remained solid and the bank was here to stay.
“I have to say that still, with six weeks to go, we are not seeing any significant things happening in our customer base that would cause us undue concern,” he said.
“When we look at our banking book and we look at our customers, we’re trading pretty well, our customers are trading pretty well, so that gives us confidence that there is an inherent resilience in the Gibraltar economy, and there’s definitely resilience in the society of Gibraltar.”
And he added: “As a bank, we look at it and think, Gibraltar is a good business for us, we’ve invested a lot, we want to keep investing in the business and we want people to look at NatWest and see us as a strong and reliable partner, so we need to keep our end of that bargain.”
“We look at the government and we see a government which is really attentive and focused on this [Brexit] issue and knows it’s important that the issue is well managed, and that gives us confidence.”
But despite that confidence in the local economy and its commitment to Gibraltar, RBSI’s presence here is changing.
Last year the group invested £1.1m in the NatWest branch on Line Wall Road, introducing a degree of automation even while giving customers the option of traditional face-to-face contact with their bank.
The group’s new strategy revolves around on two key issues, including ensuring NatWest Gibraltar remains “a strong and reliable banking partner” not just for its customers, but for the government and the regulator too.
The second element is to use automation and technology to make it easier for customers to do their banking.
Mr McLaughlin said that global uncertainty stemming from factors such as trade conflicts and Brexit made that two-pronged strategy even more important.
“The Gibraltar Government wants to bring digital into the heart of the economy, into the heart of society, and I think that’s a very important public policy objective,” he said.
“We, as a strong and reliable banking partner, have a really important role to play.”
Asked what impact the bank’s focus on technology would have on its role as a major employer in Gibraltar, Mr McLaughlin said that as some jobs became automated, new roles would be created.
And he insisted RBSI remained committed to ensuring its staff had the leadership support and skills to take on new roles as required.
“I think one of the most difficult things with digital is that people find it easy to see the current roles that digital technology might threaten, but they find it much harder to see the jobs that it creates,” he said.
“They’re less visible because mostly they don’t exist yet, and that’s true not just of banking but across all sectors where digital technology has come in.”
He added: “As I look at it today, I see a very gradual transition. We don’t have any plans for a significant change in job numbers in Gibraltar.”
“We’ve been able to grow our business in Gibraltar and growth creates job opportunities.”
“I can’t predict what exactly what will happen to every job in the future as technology comes in, but what I can do is commit to making sure that anyone who works for NatWest in Gibraltar receives good training and development opportunities so that they can find different jobs in NatWest Gibraltar as they go through their career…”
“We’ve all got a vested interest in the strongest possible labour market and we are completely committed to that in the case of Gibraltar.”