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Royal Bank of Canada says it's committed to banking in the Caribbean region, even after selling its bank in Jamaica and booking a loss.

Have a look at what shareholders are getting from the region. Then you can ask yourself why the biggest bank in the country is bothering.

First off, there's the region. Most of the economies in the area have experienced terrible pain since the financial crisis. The crisis and recession hit hard, cutting tourism and throwing people out of work. The effect on banks in the region was harsh. Non performing loans spiked, as consumers lost income and commercial properties suffered. Economies shrank, and some are still shrinking.

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Aside from Trinidad & Tobago, GDP growth is pretty negligible across the region. Double-digit unemployment rates are very common. (Check out page four of this report from RBC on the topic.)

RBC specifically is feeling pain. Non-performing loans are elevated and revenue is soft.

RBC reported that in its most recent fiscal year revenue at its Caribbean and U.S. banking business "decreased $27-million or 3 per cent from the prior year, due to lower loan balances reflecting continuing unfavourable economic conditions, as well as spread compression in the Caribbean resulting from the low interest rate environment and a change in product mix, partially offset by the favourable impact of the weaker Canadian dollar."

Revenue for the business totalled all of $801-million last year. That is roughly 1/16 of the bank's revenue from Canadian banking.

Provisions for credit losses were 1.24 per cent last year, roughly five times what they are in Canadian banking.

With loans flat and deposits rising, that crunches profitability. Net interest margin is steadily sliding.

To be sure, there are reports of things getting better in the Caribbean. For example, there are said to be bids now on properties that banks have underwater loans against. Those bids are said to be nowhere near what the banks need to cover the loans. But hey, there are bid and that's something, right?

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Operationally, it is also a challenge. You are dealing with numerous disparate countries, each with a few branches. Costs are elevated, and it's a time suck for management.

There are also signs that the tourist economy might be picking up a bit.

But even if the business does really get going, what is RBC sticking around for? Say they get the business going in the right direction, does it move the needle on a bank that last year posted overall revenue of close to $31-billion? Not likely.

The bank could sell and go back to what it once had in the region – a solid wealth management operation.

RBC can say it is planning to stay, but there are those who believe that if the right bid came along, the Toronto-based bank would be happy to part ways with its retail operation in the Caribbean.

"We would be surprised to see a wholesale exit by Royal but do not deny that it could occur, if it were to garner an appropriate value," said analyst John Aiken at Barclays.

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