The Eastern Caribbean Central Bank (ECCB), in consultation with the ECCB Monetary Council, has approved the application for the transfer of the assets and liabilities of the Bank of Nova Scotia to the Republic Financial Holding Limited(RFHL) in several regional territories.
According to a release, the Trinidad and Tobago-based bank has received the green light to take control of the operations of Scotiabank in Anguilla, the Commonwealth of Dominica, Grenada, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines, pursuant to Section 43 of the Banking Act.
Discussions on the future of Scotiabank’s operations in Antigua and Barbuda are ongoing, the release said. It was noted that the ECCB Monetary Council met on 6 September, via videoconference, to discuss the ECCB’s assessment of the Republic Financial Holdings Limited’s application to acquire the Bank of Nova Scotia’s operations in ECCB member countries.
The ECCB undertook a review of the proposed transaction to assess Republic Financial Holdings Strategic Plan 2018-2020, its condition to support the operations of the acquired banking business of Bank of Nova Scotia as well as all of RFHL’s subsidiaries.
In addition, the implications for the stability of the ECCU banking system and the technical/human resource capacity of RFHL to effectively govern its subsidiaries across multiple jurisdictions were discussed. In completing its assessment, the ECCB consulted with the Central Bank of Trinidad and Tobago (CBTT), RFHL’s home regulator.
The ECCB is in the process of communicating the requirements for finalisation of the transaction between RFHL and BNS and will continue to monitor the process to ensure full regulatory compliance, the release stated. The ECCB believes that Republic Bank’s corporate banking record and its extensive network of correspondent banks will bode well for the ECCU banking sector. The ECCB said it is resolute about its mandate to protect the EC dollar and will continue to maintain high levels of foreign reserves while protecting the stability of the banking system.
Citizens and residents in ECCB member countries are encouraged to stay abreast of developments in the financial sector. Days after an announcement was made regarding the sale of the bank in November 2018, the Government of Guyana said the sale of Scotiabank to Republic Bank is regretted and raises concerns about an over-concentration of banking services, market domination and the ‘too big to fail’ risks, with the Trinidad-headquartered bank now in possession of 51 per cent of both assets and deposits of the banking systems.
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 said, it will partner to sell insurance products in those countries.