French bank facing Cayman labour scandal
(CNS Business): BNP Paribas has come under fire locally for reportedly laying off Caymanian employees, attracting the attention of labour enforcement officers, who are said to have visited the bank’s offices in Cayman. CNS Business understands that several Caymanians have been laid off by the French bank, which operates in Cayman providing a range of banking and fund administration services. Rumours within the financial services industry suggest that BNP Paribas is in the process of shutting down its Cayman fund administration operation and has already started laying people off.
According to a source close to the bank, who wishes to remain anonymous, on 12 January, BNP Paribas staff were advised that the Cayman office was closing and operations would be moved to Dublin and the US. CNS Business was also told that two weeks ago, six labour department officers arrived unexpectedly at BNP Paribas’ offices in Cayman, pulling staff into an office for questioning. It is further understood that a separate visit by government officials took place within the past week, with the line of questioning leading some staff to assume that misleading information was provided to the officers.
“Indigenous Caymanians who are experienced and qualified have been made redundant while work permit holders remain on the job and fully secured,” the source said, while highlighting numerous investigations and HR issues relating to the firm’s management.
When contacted by CNS Business, management at the bank said these accusations were completely false, directing further questions to their media relations department in the US, however a response from them was not forthcoming.
With BNP Paribas reportedly exiting the fund administration business in Cayman, they would be the latest in a long list of financial firms, including Goldman Sachs, one of the biggest names to do so. BNP Paribas’ fund administration operation has changed hands a number of times over the years, with Fortis, Credit Suisse and ABN AMRO all former owners of this business.
Internationally, the French bank has been in the headlines with regard to developments, including significant job losses at its investment bank. The Financial Times reported in December that thousands of jobs were expected to be cut early this year by BNP Paribas and Barclays, hen they unveiled plans to slash costs by between 10% and 20% at their investment banks. In February, BNP Paribas, the largest bank in France, said cost cutting in its corporate and institutional groups of a further 12% would take place by 2019.
At press time the Director of the Department of Labour and Pensions had not responded to a request for further information. CIMA said it was prohibited by law from disclosing details of any supervisory issues with respect to a licensee, including any regulatory breaches which may require enforcement action. CIMA also said it would not normally get involved with labour-related matters unless they impacted on the fit and proper conduct of the business, but it expects licensees to advise them of significant organisational changes that could impact on employment of local staff.
BNP Paribas Bank & Trust Cayman Limited holds a Full Mutual Fund Administrator Licence and a Class B Banking Licence, while BNP Paribas in Cayman is regulated as a Class B bank, which only permits it to undertake international business.
Category: Employment, Finance, Financial Services, Local Business
Unfortunately whenever I have previously tried to encourage Caymanians to take advantage of career advancement and mobility opportunities, it has turned into can I bring everyone (girlfriend, cousin, aunt, grandmother, mother, etc.) with me and will you find them jobs too or pay me more so I can afford to go? Some even feel that the work of another office or account not intended for Cayman should be moved to accommodate them.
Sorry but you are not thinking like you recognize the need to provide shareholders with value or profitability. No business goes anywhere to act as a charity. They are in business to make more and make as much of it as they can.
Cayman is a poisonous brand in mainland Europe. No surprise that banks are moving operations out.
Does the anti-expat brigade get it yet? When you chase the expat away it is often the job that goes too. If it is too expensive or too much hassle to just get on and do business in Cayman, it can easily be moved elsewhere.
The job security in the public sector is awesome. The only downside to this is the many incompetent people that fail to or are incapable of improving. You’re stuck with them for a very long time.
This security and excellent benefits is the reason why the public sector is bursting at the seems with employees. The salary is so-so compared to similar posts in the private sector, but the trade-off is unbeatable.
This is all unless you’re a p[foreigner]artner in the private sector. Then you get salaries so high that job advertisements wouldn’t dear list them, and when you part with the company you leave with some really swell deals, including golden parachutes.
Real world calling. You don’t lay off your best staff.
Headline, CNS! From the headline I was preparing to read about a scandal but couldn’t find it in the story. Sounds like Cayman was going through its usual rumor-mongering routine, and it is unfair to the bank to headline the story as if the rumors are true. And, by the way, I am in no way connected to the bank.
A bank only has to answer to its shareholders – period. Perhaps if Cayman didn’t have so much bad publicity in the financial sector recently (eg CNB and Caledonian) then other global players might not be so quick at moving out of the jurisdiction. Cayman has become too risky yet it purports to be well regulated. Even CIG’s own departments have had some high profile corruption cases recently (eg HSA and Mr Watson). Confidence is being lost in the island and a good piece of housekeeping is required. Stop blaming other organisiations or expats and get your act together!
One word for this post…rubbish! Have you failed to notice what’s been going on in the rest of the world from your cave!
Sorry to be picky, but CNB hasn’t done anything wrong. CNB were not party to the problems affecting two other companies also owned by CNC. It appears that, in retrospect, Caledonian didn’t do much wrong either, since they settled with the US for a zero dollar penalty. The US authorities have also been resoundingly criticised by the US Courts for what is effectively abuse of process.
Hear that? It is the sound of the golden goose being slain.
Six labour department staff turn up to investigate a single foreign owned entity for redundancies, where the company is already committed to withdrawing from the island, making redundancies inevitable and any threats of enforcement meaningless, yet labour routinely fails to investigate or enforce actions ranging from stealing employees pension contributions to not providing health cover. Nothing to do with the identity of the complainants, or the ownership, right?
Well said. The DLP are useless. They are unable or unwilling to enforce what they should be doing but like you said they want to make a big public spectacle of themselves by going at this business.
WHO you say has been called in to assist??? The Labour Department – what a laugh. They are useless. Just this week they are telling someone that they cannot force an employer to pay unpaid wages and vacation pay and that if they want this they must go through the courts themselves to collect as it is a civil matter. So we have a Labour Law that says employers must pay wages (and gives them 30 days to do so) and they must pay vacation pay – but if an employer fails or refuses to pay these benefits they (the Labour Department) cannot assist. Okay then what exactly does the department do and what use is the Law..
Sigh the law actually says this. If the labour tribunal awards you payment and the person doesn’t pay you have to use the court system to 1. get a judgment for the debt owed and 2. enforce the judgment. There is no scope in the labour law for a tribunal to enforce payment. Crickey do you all ever research anything before criticizing?
just another day in the wacky private sector….wow! thank goodness the civil service has stepped in.
This sort of tinpot behaviour will only accelerate the downsizing of more operations in Cayman.
Companies downsize for a variety of reasons. It tends to be a global decision. It is not due to silly emotional behaviors.
Profit is the name of the game. If a company is not making a profit then they make decisions. If it happens that they aren’t treating the staff well, then the laws of the jurisdiction come into play. BNP Paribas are in many countries worldwide. The particular personalities aka management may not have played fair, but it also could be reducing costs until they depart.
You obviously have never wielded the knife. It is a great time to act on long term or short term resentments.
Cayman has a real problem. It is doing business as a world class player but it has some people with the mentality of a 3rd grader running its affairs. At some point they have to understand that they cannot cut their nose to spite their face. This bank’s business is on its way out but will probably continue to hold some form of licence and pay handsome fees to keep the licence in place…until this. I wouldn’t blame them for packing up all of their toys and leaving. We are in dangerous times. We are no longer at a point in time where these businesses would do or pay whatever to be here. There is very strong onshore and offshore competition to Cayman. The large cayman offshore firms such as maples and walkers have offices in other offshore jurisdictions that they are also happy to promote that compete against Cayman. They are not just loyal to Cayman. So everyone needs to read the writing on the wall and straighten up and fly right!
Well said 3:32pm. Spot on!
Mind you what is disconcerting is the fact that as a British OT, the Cayman islands is in direct competition with the financial services in London!
How long before Cayman falls and London sweeps their business away for good?
Taking the story at face value it could be that some of the expat workers might be being retained by BNP and moved with the business, if they took some of the account managers with them the customers will likely have a bit of continuity.
Then why not allow that opportunity for the Caymanian staff?
Because the only reason they were hired in the first place is that they were Caymanian, and now they are pulling out of Cayman that has no traction with the bank?
Hiring Caymanians and carrying them on the books is viewed like a necessary and unofficial tax in some companies.
Anonymous 8:13 am – How do you know that opportunity was not offered to the Caymanian staff? Maybe those Caymanians are not interested in living abroad. Maybe they like living in their own country.
You should go professional with material that good.
If your main qualification on your CV is being a Caymanian, then that is all well and good – in Cayman. But being Caymanian doesn’t get you anywhere if you have to fight for a job in another country, which is what’s going to happen here
Maybe these are more rats who suspect the ship is not entirely seaworthy.
CNS – a correction is needed to your story. UBS has not “exited business in Cayman”. Globally, UBS sold its fund administration business to Mitsubishi, and globally, that business now operates as Mitsubishi. All the UBS employees in Cayman have become Mitsubishi employees in Cayman. Just a change in owners, not pulling out of Cayman.
CNS: Thank you! I have removed reference to UBS.
UBS has pulled out of fund administration in Cayman which ever way you look at it….Funds don’t have to have a Cayman based administrator and services can be provided more cheaply from Canada or India….Other banks will follow