SCOTIABANK Guyana has recorded an after-tax profit of $2,553,640, 000 for 2018, just months after the parent company announced that it planned to sell its operations in Anguilla, Antigua, Dominica, Grenada, Guyana, St Kitts & Nevis, St Lucia, St Maarten and St Vincent & the Grenadines to Republic Financial Holdings.

According to the bank’s condensed financial statements for 2018, its profit dipped by about $254 million compared to 2017.

Scotiabank’s report outlined that the Guyana Revenue Authority (GRA) issued additional assessments for corporation tax liability of $1,122,791,107 for the years of assessment, 2011 to 2017.

“The bank has appealed the GRA’s assessment. Management believes that the bank will be successful on appeal and accordingly, no provision has been recognised in these financial statements for the effect of the additional corporation tax assessment,” said the bank.
Meanwhile, the bank confirmed that subsequent to year-end, the Scotiabank Group had entered into an agreement to sell Scotiabank Guyana operations, subject to receipt of all applicable regulatory approval. “Adjustments, if any, have not been made to these financial statements for the effect of this transaction,” said the institution.

Bank of Nova Scotia (BNS.TO) in 2018, had reported fourth-quarter earnings which were marginally below expectations and planned to exit nine Caribbean countries as part of a restructuring of its operations.

The bank, which has operated in the Caribbean since 1889, said that it would refocus its business in the Region by selling its insurance operations in Jamaica and Trinidad & Tobago to Sagicor Financial Corporation, with whom it will partner to sell insurance products in those countries.

In a statement of its own, the Ministry of Finance had said Republic Bank currently holds 35.4 per cent of the banking systems assets and 36.8per cent of deposits in Guyana; the acquisition of Scotiabank will up this to 51 per cent of both assets and deposits.
This too will have an impact on competition and the potential for Republic Bank to have too much influence on pricing of banking products and rates. The sale will also have an impact on issues related to correspondent-banking options and the loss of jobs, with Republic Bank likely to consolidate branches.

According to the ministry, the Financial Institutions Act (FIA) has clear stipulations regarding ‘acquisition of control’ and requires approval of the Bank of Guyana, following the submission of an application and due diligence being conducted.

The finance ministry said the decision, made when Guyana’s economy is on the cusp of financial transformation with the onset of the massive new oil and gas sector, raises concerns and is regretted.