Why Deltec has remained one of the Safest Banks for Decades

When it comes to money our and assets, we all want and need to be safe and prudent. So just how much research have you conducted on your bank to know if it can survive a crisis? Do you know there are indicators of what a safe bank looks like?

Since coming face-to-face with the most recent economic tragedy in recent times – the Covid-19 pandemic and more recently, the 2023 U.S. banking crisis, its apparent that if the right structure is in not set in place there could be a fall of industries, communities, and even countries. Very similar to 2008, persons became interested in the safety of their financial institutions when the Great Recession hit and closed down 500 banks. This was the first time it had become so obvious, that despite the trillions of dollars that can be deposited into a bank, it can in fact still fail.

Now that we are making our way through yet another huge economic crisis its vital that you be made aware of just how safe your bank is. Many people when looking at a bank tend to pay attention to qualities at face value -that can include a banks branding strategy or it’s marketing tactics. However the proof will be in the pudding when it comes to your banks history, and the initiatives that it brought forth. So, let’s take a look at what you should know about your bank when it comes to knowing if it is safe.

History and Experience

This one may be obvious – but your banks history can tell you everything you need to know about its stability and safety. History has shown that some of our biggest economic crises have revealed just how ready we are in our plans for unexpected turbulence. If you are not a client of a new bank then you can place a safe bet that your bank has had it’s fair share of a track record.  This plan should represent past and present ideas, it should show not only how your bank plans to navigate through a crisis but also how it has planned to prepare for one. You should look at things like your bank’s initiatives throughout a period of time and some of the successful moments your bank may have survived throughout the time of an economic blow.

-Deltec Bank & Trust Limited (“Deltec”) has a portfolio that shows 77 years’ worth of banking experience that includes work with complex, multi-jurisdictional entities, individuals, and families in protecting and enhancing wealth. Small research will show that Deltec has been instrumental in changing and initiating industries like the securities industry in Brazil back in the 1960s. This industry has brought forth the country of Brazil an annual growth of 15% to 20%. Deltec would later register as investment advisor with the SEC in 1987. These pivotal moments have added to the pioneering mission Deltec had set forth very early on. Fast forward to today and its clear to see there is a standard at Deltec that is now set from the base of experienced professionals who are well equipped to perform business services for multi-jurisdictional markets -which means there is an overall understanding from the ground level and up in the importance of global affairs and concerns – this is a critical skill in perseverance of an everchanging climate for a bank.

A Solid Plan of Action

This one may go without saying either, however the question remains have you seen your banks plan for the upcoming months/years? Do you know what it states?

At Deltec there is an enterprise risk management framework set in place to specifically tackle big and small crisis. Currently, it addresses both natural disasters, market conditions and even the evolving business environment, while also emphasizing the protection of the continuity business operations. A huge part of Deltec’s emphasis is on security structure and that is primarily due to its unique location – Deltec is headquartered in the midst of a hurricane belt, in The Bahamas, and with that in mind its premise of strength relies on the action plan to combat unexpected crisis. Deltec offers a conservative strategy that serves as one of Deltec’s greatest advantages –this includes healthy liquidity ratio, no debt, no proprietary trading, zero commercial loans, and no leverage.

A Regulated Bank

Believe it or not, location is another crucial aspect of knowing how stable your bank is. Bank regulation is identified as a complex process brought on by your banks unique location. According to one definition there are two components of banking regulation which include supervision and licensing.  Licensing involves an evaluation of the entity’s intent and the ability to meet the regulatory guidelines governing the bank’s operations, financial soundness, and managerial actions. Supervision ensures that the functioning of the bank complies with the regulatory guidelines and monitors for possible deviations from regulatory standards. Supervisory activities involve on-site inspection of the bank’s records, operations and processes or evaluation of the reports submitted by the bank. Regulators usually impose requirements that are tied to the level of risk exposure.

-It is no different with Deltec Bank – it is regulated by the Central Bank of the Bahamas under the Banks and Trust Companies Regulation Act 1965. The Central Bank of The Bahamas requires that extensive information for an application process from a banking institute. Once a bank is licensed, full financial statements must be filed annually. The Financial Transactions Reporting Act 2018 is another form of regulations that require banks like Deltec to be regulated by Compliance Commission of the Bahamas to register. If in fact these protocols are not kept there are financial penalties and other sanctions that take place against the bank.

Learn more on The Central Bank of The Bahamas’ website.

A Conservative Strategy

A conservative strategy serves as another one of Deltec’s advantages – with healthy liquidity ratio, no debt, no proprietary trading, zero commercial loans, and no leverage. Deltec has a mandate to serve in a conservative practice through credit policies and through a commitment to sound capitalization. These prudent practices ensure that there is no threat to the Bank’s sustainability, safety and soundness.

A healthy liquidity ratio means Deltec is in good financial health and is predicted to have a lesser chance of facing financial hardships. This is because Deltec offers no commercial loans which helps keeps the bank out of debt. Another advantage to Deltec’s stability is no proprietary trading -this is a high risk propositions for banks, and it allows a bank to invest for direct market gain instead of earning commissions by trading on behalf of clients. There is just no way to tell if in fact propriety trading actually is worthwhile for a bank to pursuit – and so this saves time and money for DBT and all its clients.

Deltec does not operate a balance sheet based banking model. This means we do not make our money by earning interest by investing our clients deposits. We generate income on fees for offering excellent banking services. This means the Bank never be exposed to a liquidity/maturity mismatch that caused the 2023 banking failures.