There has been a lot written in recent weeks about the unprecedented times that we find ourselves in. This is an understandable position for commentators to take. The impact of the COVID-19 pandemic on the global economy draws comparisons with the banking crisis just over a decade ago, the terrorist attacks of 9/11 and various other stock market crashes over the years. When these other crises were taking hold, we saw massive turbulence in stock markets around the world, volatility in interest rates and the consequential impact on unemployment, debt levels and government intervention. What makes the Coronavirus crisis different, however, is the direct impact on people and their livelihoods. Things that we have always taken for granted in peacetime like being able to travel, go to work and socialise with people were taken away from us during lockdown. This is different to other crises.
From the perspective of running a business, I ask myself: are these times truly unprecedented? I would argue not, particularly considering the way the Group responded to the unravelling crisis in early March this year. Indeed, our response was similar to the one I adopted in successfully steering a large international offshore bank through the banking crisis as Managing Director over a decade ago. The board of Capital International Group decisively focused on three priorities to tackle the challenges presented by the situation. These were:
- Protect our people
- Protect our clients
- Protect our cash
With a committed workforce of about 150 people across the Isle of Man and South Africa, our first priority was to ensure that our people were safe and their jobs were secure. We identified those colleagues that were vulnerable or living alone and put in place specific measures to ensure they remained both physically and mentally well during lockdown. Across all of our teams in both countries we had daily online team meetings, online exercise classes, social events after work such as quizzes, end of week get-togethers as well as professional coaching and counselling for various colleagues that were challenged by their particular circumstances. I delivered a weekly update to all staff either via recorded video uploaded to our staff intranet or live on Microsoft Teams. This helped to provide direction, support and occasionally some humour.
With strong financial foundations we have kept everyone at work, with no staff being let go or being furloughed. We have hired half a dozen people in the past quarter to work on the completion of our banking project with more commentary on that below. Owing to the strength of our IT and operational infrastructure, we moved from 4 corporate offices on a Monday to 150 home offices by the Wednesday with no service interruption to our clients and intermediaries. At the height of the crisis a team of 8 senior members of staff in the Isle of Man and South Africa met in a daily ‘Cobra-style’ online meeting. Under the guidance of Werner Alberts, our Chief Operating Officer, this team was tasked with coordinating our response in line with our 3 priorities.
The swift action and decisions taken in the early days of the crisis gave our people the security they needed in order to focus on our clients. Whilst stock markets were plummeting by nearly 30% at one point from their position at the start of the year, our relationship managers, operational staff and investment teams were focused solely on our clients. We strived to share our in-house views to offer reassurance to concerned clients and through the collaboration of our people on Teams, we were able to ensure our clients’ day to day business and transactions continued as normal. Thankfully the markets have rebounded strongly since those low points and, impressively, new business continues to flow strongly.
2020 was always going to be a challenging year for the Group as we work hard to complete the build-out and testing of our new digital banking platforms. Having been awarded a provisional class 1 (2) banking licence from the Isle of Man FSA in August 2019, we are working incredibly hard towards completing the project. We are aiming for a soft launch to existing Capital Treasury Services clients around the end of the year. All being well following the soft launch, we will then open the virtual doors to new clients in 2021. Leading this project has presented numerous challenges, many of which were a result of the pandemic, but our focus throughout has been to thrive during these times rather than merely survive.
Our prudent management of the Group’s finances stands us in good stead to complete this exciting project in the months ahead. We are looking forward to bringing to market a new digital corporate bank focused on qualifying CSPs, professional services firms and high net-worth individuals in the offshore markets who are in great need of a new alternative in banking.
None of this would have been possible without the support of many people including our clients, who have continued to place their trust in us; our shareholders, who have never shaken in their support for the management team; our regulator, who has worked constructively and responsively with us; and of course our colleagues, who have been nothing short of outstanding in their commitment and determination to deliver for our clients during these challenging times.
It’s hard to say whether we’re through the worst of it as yet. Having had no active cases of COVID-19 for over a month, the Isle of Man has entirely returned to normal life, albeit with border closures still in place. The UK, Europe, China and the US, on the other hand, have all suffered secondary spikes
No matter what the future may hold, the Group will continue to balance the careful and thoughtful management of our clients’ assets with the entrepreneurial and ambitious vision that we have for the Group. I am very grateful to you all for your ongoing trust and support.