–says regional association of Republic’s acquisition of Scotiabank’s operations

THE Caribbean Association of Bankers (CAB) says that while some of the concerns over Republic Bank’s acquisition of Scotiabank’s banking operations in nine Caribbean jurisdictions may be well founded, it views this development as a positive opportunity for the regional financial services sector.

Further, the body noted that the Region must repose reliance and trust in its governments and regulators to preserve the integrity of the financial sector in light of the developments.
In a statement this week, the CAB said that it has noted the concerns of public and private sectors with respect to the proposed sale of Scotiabank’s banking operations in nine (9) Caribbean Countries to Republic Financial Holdings Limited (RFHL).

The association noted that the Region has, in its history, experienced migration, acquisition and consolidation of both locally owned and international financial services companies. “Despite these situations, the sector has continued to be stable, guaranteeing customers the same high standards of integrity and customer service they expect from their banks,” said the CAB.

The CAB said it is of the opinion that the ability of RFHL to be positioned to acquire assets of one of the leading international banks, despite the myriad challenges facing the regional banking sector at this time, is to be commended. It said this is a true reflection of the ongoing maturity of the financial services sector in the Caribbean.

“To this end, we applaud the RFHL for their confidence in the Region and sector. RFHL has been in operation since 1837, originally formed under the name Colonial Bank in Trinidad and Tobago. Today the institution operates in 15 subsidiaries with over 4000 employees in Trinidad, Grenada, Barbados and Guyana and an off-shore Corporation in the Cayman Islands. RFHL also operates in Suriname with approximately 5,500 employees within the group.

“In 2013, the RFHL made history as the first Caribbean Bank to conduct business on the African continent through an acquisition of a 40% stake into the HFC Bank in Ghana. The bank has confirmed its desire to purchase the operations of Scotiabank in these nine territories (Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines), for USD$123 million –  subject to the necessary regulatory and legal approvals,” the CAB said.

The statement said that Scotiabank’s decision to refocus its investment options into bigger markets to take advantage of economies of scale, further underpins the need for the Region’s indigenous banks to come together to strengthen their position in order to remain viable and competitive in an ever-changing global economic market. “Given the challenges in the global financial sector, mergers and acquisitions will continue to be the norm and regional banks should position themselves to take advantage of the opportunities as we operationalise the CSME,” the CAB stated.

The association believes that “we must place reliance and trust in the mechanisms which regulators and governments will employ to preserve the financial integrity of the regional financial services industry and the growth and development of our economies.”

The CAB is a community of banks and other financial institutions in the Caribbean, which proactively influences issues impacting the financial services sector through advocacy, education and networking. “The CAB represents fifty-three (53) banks and financial institutions in the Caribbean, with an asset base in excess of US$41 billion as at Dec 31, 2017,” said the CAB.