Bank of Montreal closes doors in Iqaluit

GREG YOUNGER-LEWIS

Bank of Montreal representatives are saying little about why they’re closing their only branch in Nunavut at a time when the bank is attracting enough business in the territory to make a profit.

Management at their branch in downtown Iqaluit posted a notice last month saying they will close the Nunavut branch on Nov. 5.

Bank officials blame a lack of business for the closure, but refused to disclose how much business they have in Nunavut.

The bank closure reduces the number of charter banks in the territory to two: the Royal Bank and CIBC.

Ralph Marranca, a Bank of Montreal spokesperson, confirmed the closure doesn’t mean his bank couldn’t make money in Nunavut – it just couldn’t make as much as the corporation wanted.

“It’s a very competitive market in Iqaluit,” Marranca said. “We looked at it carefully and drew the conclusion that we can’t sustain a viable operation here.”

A look at the line-ups in the bank branch suggests the financial institution turned a healthy profit margin while it was open.

In fact, Nunavut brought in more customers than BMO staff could handle, according to one of the branch’s five employees.

The employee also said the Nunavut branch hasn’t lost money since the year after it opened its doors beside the Iqaluit post office, about 11 years ago.

The employee estimates BMO had more than 5,000 customers, most of them outside Iqaluit. Banking analysts consider thousands of clients in a region with less than 30,000 people, like Nunavut, to be a high volume of business.

The employee, who asked for anonymity, said the closure is a clear example of how banks put profits ahead of their clients’ needs.

For example, the employee questioned how bank management could cite a lack of business in Nunavut, when the real estate market continues to be lucrative.

“There are so many mortgages we can’t handle them all,” the employee said. “We’ve been turning people away.”

The employee said the bank isn’t being completely honest about its policy on making higher profits, in order to avoid a public relations embarrassment.

“If you’re going to shut down, then shut down,” the employee said. “But at least give the community some real answers.”

At least one client feels that the bank was up front about their reasons for leaving Nunavut.

Bryan Pearson, a long-time client of the Bank of Montreal, said he was shocked to hear the Nunavut branch was closing.

He said it is “a great loss” because BMO provided services that other banks initially failed to give, such as Inuktitut language services and flying representatives to communities outside Iqaluit.

Pearson said he’s been impressed by the Bank of Montreal’s style of business in Nunavut since the 1950s, when it opened its first, short-lived branch in Iqaluit. At the time, two employees ran it from a tent near where the Legion stands today, for about 10 years.

“It all boils down to the bottom line,” Pearson said. “If it was a profitable venture for them, they’d stay. The only reason they’re leaving is they aren’t making any money.”

BMO officials said they understand most of their customers will not want to transfer their accounts and loans to branches in the South, so they are offering to help set up new accounts with the CIBC and the Royal Bank branches.