TOWARDS the end of November 2018, the head office of Scotiabank in Canada and Republic Financial Holdings Limited (RFHL), the parent company of the Republic Bank branch in Guyana, issued statements announcing that RFHL had entered into an agreement to purchase Scotia’s operations in Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines at a price of US$123 million.

This purchase was to be subject to all regulatory and customary approvals and conditions. This announcement of the purchase of the Scotia branches came as a surprise to the business community and the rest of the Guyanese public and even at the Republic Bank branch’s Annual General Meeting which was held in Georgetown on Monday, December 10, it was disclosed that the local branch had no part in the negotiations to purchase Scotia’s Guyana branch.

The main stakeholders, vis-à-vis this transaction, are the Bank of Nova Scotia, Republic Financial Holdings Limited, the Banking Industry of Guyana, the Consumers and the Public at large, and the Government of Guyana. So far, there has been little public debate on the sale and statements have been made only by Bank of Nova Scotia, Republic Financial Holdings Ltd and the Ministry of Finance but very little from the Banking Industry or the Consumers. Nova Scotia’s statement was largely concerned with their sale to RFHL and had little to say on the individual branches.

RFHL’s main statement was made by its Chairman, Mr Ronald Harford. He said in his statement: “We purposefully seek out opportunities where we know our Group’s unique approach to financial services will make a substantial difference. Our interest, however, is not just in the financial well-being of our clients and employees, but in the overall success of the societies in which we operate and on which we depend for our livelihood.

Our focus in seeking expansion opportunities in the Caribbean is a testament to our Group’s confidence and commitment to the Caribbean Region. We acknowledge the concerns expressed by the governments of Antigua and Barbuda and Guyana and we intend to fully comply with our regulatory requirements in fulfilling this vision. We are optimistic that when the facts are fully articulated to the relevant authorities, the merits associated with the Group’s presence in the various territories will become evident”.

The Banking Industry has not so far expressed any public reaction and members of the Consumer Community have spoken in one or two letters to the editor. Hon. Winston Jordan, Minister of Finance, has however made the most important and impacting statement on the issue. Mr Jordan pointed that it will lead to a number of issues for the Banking Sector in Guyana and for the public which the Finance Ministry, the Bank of Guyana and the Government of Guyana will need to carefully consider. He showed where the acquisition of Scotia will give Republic Bank 51 per cent of the banking assets and deposits of the country.

Mr Jordan went on to say: “The Scotiabank’s decision is made when Guyana’s economy is on the cusp of transformation with the massive new oil and gas sector raises concerns and is regretted. Among the concerns is the effect on competition and the potential for Republic Bank to have too much influence on the pricing of banking products and rates, issues related to correspondent banking options and loss of jobs as a result of Republic consolidating branches were other concerns”.

The Consumer Community has three basic concerns in addition to those outlined by Minister Jordan. The first is that the banks operating in Guyana, especially the indigenous banks, would be miniaturised by the over-arching presence of Republic Bank. Such would be unhealthy for the Banking Sector of Guyana, the Private Sector and the consumers.
The second concern is that if a foreign bank controls the Banking Sector especially now that Guyana is becoming an “oil state”, there could not be any guarantee that governmental or other confidential financial information be leaked to other countries or persons to the detriment of Guyana. In the national interest, we do not feel that the Banking Sector should ever be dominated by foreign interests.

The third concern is that if any one bank is allowed to control or dominate the Banking Sector, consumers could be placed in a position where bank charges and rates could be invidious and services offered could be poor or mediocre and there would be little or no redress for the consumer.

The consumer community firmly supports Minister Jordan’s statement and emphatically rejects the sale of the Scotia Guyana branch to RFHL. Other options should be explored, as for example, selling the bank to a local consortium.
The consumer community welcomes the assurance that the Ministry of Finance will continue to stay abreast with the matter and will act in the best interest of the citizenry and issue updates as necessary.