…says local banks should have been given first preference

The Antigua and Barbuda government Tuesday said it was “deeply disappointed” that the Bank of Nova scotia would decide to sell its operations “without any form of consultation with the regulators or the Finance Minister.”

The Guyana government said the agreement “raises a number of issues for the banking sector in Guyana and for the public which the Ministry of Finance, the Bank of Guyana and the Government of Guyana will need to carefully consider”. The Trinidad-based Republic Financial Holdings Limited (RFHL) said it had entered into an agreement to acquire Scotiabank’s banking operations in nine Caribbean countries.

A RFHL statement said that the banks being acquired are located in Guyana, St. Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. It said that the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.

But in a letter sent to Suzan Snaggs-Wilson, Scotiabank general manager in Antigua and Barbuda, Prime Minister Gaston Browne said that he was “deeply disappointed’ at the manner in which the sale had gone through. “On behalf of my Government, I advise that I am deeply disappointed that the authorities of the Bank of Nova Scotia would decide to sell its operations in Antigua and Barbuda without any form of consultation with the regulators or the Finance Minister whose agreement and authority for such a sale are required by law.

“I am further deeply concerned that the Bank of Nova Scotia would spring such an important decision on the people of Antigua and Barbuda, particularly its many clients who have displayed great loyalty to the bank for almost 50 years, providing it with significant profits,’ Browne wrote. He said that he was now informing the authorities of the Bank of Nova Scotia “that their decision to sell the operations in Antigua and Barbuda, without the requisite consultation and agreement of the regulators and the Government of Antigua and Barbuda, is unacceptable.

“Should the Bank of Nova Scotia wish to divest its operations in Antigua and Barbuda, it would be necessary to seek the government’s approval. In this connection, my government would strongly commend that such divestment should be offered first to local banks as the priority. “Indeed, I am aware that, notwithstanding the unexpectedness of Bank of Nova Scoria’s announcement, a consortium of such banks has already expressed an affirmative interest to acquire,” he said.

Browne said that his government now expects “a formal application by the authorities of the Bank of Nova Scotia for the terms of any divestment, including a reasonable time to identify new local owners, and assurances of the safety of the assets and investments of local clients”.