Editor’s Note: Christopher A. Cruz is president and CEO of the Pacific Islands Development Bank. He was appointed in December 2019.
Cruz started his banking career with Bank of Guam as a management trainee in 2007. He was promoted to credit officer at the Upper Tumon branch in 2008, where he served in both the lending and operations function of the branch. He was promoted to assistant vice president and branch manager of the Pohnpei branch in 2012. He returned to Guam in 2014 and was promoted to vice president and relationship banking manager, the position he held until taking up his post with PIDB.
Cruz was named 2014 Bank of Guam Branch Manager of the Year in 2014. The Pohnpei Branch was named 2014 Bank of Guam Branch of the Year. Cruz was named U.S. Small Business Administration Banker of the Year in 2017. Cruz is a member of the Rotary E-Club of Pago Bay Guam and serves on the parish council of Our Lady of Peace and Safe Journey Catholic Church in Chalan Pago, Guam.
Cruz holds a 2006 bachelor’s of arts and a professional master’s of business administration, both from the University of Guam.
The Pacific Islands Development Bank was charted on July 5, 1989.The bank was established as a regional development financial institution to aid in the economic and social development of the Pacific nations. Our members are our shareholders and consists of the governments of Guam, the Northern Mariana Islands, the four state governments of the Federated States of Micronesia, namely Chuuk State, Kosrae State, Pohnpei State, and Yap State, the Marshall Islands, Palau, and the Kwajalein Atoll Development Authority as an associate member. PIDB offers commercial, residential and consumer loans.
Q: PIDB was chartered in 1989 and is not the only development bank in the Pacific region. Do the islands still need development banks or is strategic lending still important as a means of economic development?
A: Development banks are unique, valuable, and still relevant today considering we can fill in where commercial banks and other finance companies either cannot or do not. There is still great value in being able to provide services specific to the needs of smaller, underserved demographics. In turn, this helps create jobs and opportunities for entrepreneurship.
Q: What have the trends been in requested loans for the past couple of years and do you think that the trend will change at all due to COVID-19?
A: In the years leading up to this outlying one, startup businesses in different industries were able to take advantage of the resources made available through various government programs. Many of these ventures sought financing from lenders to get them up and running. With the uncertainty that the COVID-19 crisis presented, plans to start, and even expand small businesses seemingly have been put on hold.
The worst part is that some of those businesses that did start some two or three years ago have had to shutter. There are some that were able to refocus their efforts and stay in business by adapting to the conditions of today — online purchase options, take out and to-go options, drive-thru retail options, etc. Even at that, because of the growing concerns of this healthcare crisis, trying to borrow is a scary thing for most. The trend has been for home improvement loans of various sizes. People are home and they are now able to prioritize repair of their houses because they are spending more time there and are seeing that these demands have previously been shelved. Considering the livelihood of all people have changed, so to have the priorities and demands. At the moment and for most, borrowing money is certainly not a priority. Plans such as vacationing or purchasing of investment property, or as mentioned, expanding a business, have all been put on hold.
Q: Have you seen requests for deferral of payments due to COVID, and how is PIDB managing those requests?
A: Yes, we received numerous requests for loan payment deferments and evaluate the requests on a case-by-case basis. We continue our work to be as sensitive to the conditions of our borrowers and provide as much relief for them as we can.
Q: Sometimes PIDB guarantees loans with other financial institutions, and vice versa. Do you think guarantees will be more difficult in the short term?
A: At the moment, guaranty schemes may not be the focus considering, as mentioned previously, the inhibitions of the consumer to borrow. We may see more as far as government participatory loans or programs such as the Paycheck Protection Program or the Economic Injury Disaster Loan, to name a few. Eventually as borrower confidence rebounds, banks, and other lenders like us will return to conditions that warrant loan guaranty schemes.
Q: Apart from loan guarantees, how does PIDB work with other lending institutions in the region? Do you discuss for example, legislation that affects property and inheritance?
A: I believe that there are opportunities for the development banks in our region to become more cooperative with each other. In our region, real estate has and will always be one of the most sensitive components to collateral for a lender. In that respect, it is critical for me to rely on the information I can get from the FSM Development Bank, the National Development Bank of Palau, or the Marshall Islands Development Bank considering the details I may not be afforded by the laws in these jurisdictions, for example.
Q: Different islands have different laws and customs that affect lending. Are these factors that PIDB allows for in its lending policy or in doing business?
A: The PIDB values the uniqueness of our member island nations and of course considers the value these traditions serve for the people. We do not write into our policy customary practices or traditions but consider all loans on an objective basis and look at tools such as credit reports and financial statements to support decisions on loans.
Q: How do you keep a sense of cohesiveness with such a diverse membership in different geographical locations?
A: The PIDB has aligned itself with a mission that all members can rally behind, which is a focus to support the social and economic welfare of our region. Our boards (board of governors and board of directors) are representatives of the people and have set a firm foundation for the development bank to work for our people all around the region.
Q: Looking forward, what do you see as challenges to the bank’s smooth operations and success?
A: Needless to say, COVID-19 has impacted our ability to meet some of our goals this year. We know that even as we work to recover that people are not travelling and not doing the things they essentially want to do and that means that they are not looking to borrow. Again, as confidence continues to be restored, we know that we will see increased demands for loans and other bank services. Despite this and more, we remain focused and motivated to execute at a higher level in the coming year and forward.
Q: What drew you to the financial services profession? Was it the fact that you possess the abilities that the field demands, or a combination of factors?
A: Banking and finance was not my background, coming out of my first four years of college at least. I am a political science major and wanted to study law. An opportunity with one of the largest banks in our region, the Bank of Guam, was afforded to me. After training and in part, working in nearly all sections of the bank from the branch and operations, to compliance, to card services and collections, I found my passion with lending. It is extremely rewarding being able to provide the missing piece of the puzzle for someone to do what they need to do: get medical care off-island, purchase a vehicle, build their dream home, or start and grow a business. Making and building relationships means a whole lot to me, it is what I know and love. I am not sure how this sense of belonging or passion would have faired out had I become a lawyer. mbj