Entry of more banks seen By ALDWIN R. FAJARDO

Bouyed by the government’s economic revitalization and diversification program, local officials are optimistic that more financial institutions will to come to the Northern Marianas.

Business analysts said more banks would be needed since the anticipated infrastructure developments would require more financing from private institutions.

According to the commerce department, there have been indications of the entry of other banks to the Commonwealth although there has not been any formal application yet.

However, there had been renewed discussions on issues surrounding Foreign Sales Corporations [FSC] and Offshore Banking Facilities in the CNMI. These financial institutions could be encouraged to mitigate some of the adverse economic conditions confronting CNMI’s business community.

The business community has been pressing the government to initiate an intensified promotions to entice foreign financial companies to set up FSCs in the Commonwealth while suggesting that fees should be lowered.

Processing requirements should also be eased. Asian companies should be lured to take advantage of the opportunities of setting up Offshore Banking Facilities on the islands, Commonwealth Development Authority Board Chair John S. Tenorio said.

The CNMI, according to Mr. Tenorio, has the expertise and the communication infrastructures to cater to these types of establishments. “There is tremendous confidence in the CNMI about investment opportunities,” he said.

With the presence of big foreign banks in the islands, officials are upbeat that more banks will be encouraged to set up offices here.

In 1998, the Hong Kong Bank and Shanghai Bank Corp. and the First Hawaiian Bank, two of the world’s largest commercial banks, have opened up a branch each in Saipan.

Officials said it may not be too soon that other leading banks will follow. They said the entry of big foreign financial institutions have forced others to improve their services to either retain clients or to stay competitive.

There are at least 10 banks — nine are in operation with physical facilities and locations while two were licensed and are operating via their resident agents — in the Northern Marianas at present.

Local and foreign banks in the Northern Marianas recorded dramatic increase in total deposits with last year’s second quarter figures reaching over $550 million despite major setback that hit the local economy in the last two years.

Statistics obtained from the Department of Commerce indicated that during the second quarter of 1999, local and foreign banks operating in the CNMI posted an aggregate $554.5 million in total deposits.

This figure is more than $25 million higher than the $528.8 million cumulative government and private deposits recorded during the same period in 1998 for all financial institutions in the CNMI.