…blocked from Guyana takeover

ON the heels of being blocked from taking over Scotiabank here, the Republic Financial Holdings Limited (RFHL) announced on Friday that it closed its acquisition of seven Scotiabank operations on October 31, 2019.

In a release, the bank said following receipt of approval from the Central Bank of Trinidad and Tobago, the Eastern Caribbean Central Bank and the Central Bank of Curacao and St. Maarten, and the execution of the Banking Business Vesting Orders in five of the Eastern Caribbean territories, RFHL formally acquired Scotia’s operations in Anguilla, Dominica, Grenada, St. Kitts & Nevis, St. Lucia, St. Maarten, and St. Vincent & the Grenadines.

The acquisition will add 350 team members to its staff complement, US$1.5B to the Group’s total asset size, and US$20M to its net profits. The total asset base of the Republic Group will grow to approximately US$14.5B with profits of approximately US$260M.

Expressing his appreciation to all those who contributed to the successful completion of the transaction, which was originally announced in November, 2018, Chairman of the RFHL Group, Ronald F. deC. Harford stated, “I would like to express my thanks to the many regulators and the governments of the seven countries for their expressions of confidence in the group. I would also like to extend my appreciation to the staff of both RFHL and Scotiabank who worked tirelessly to make today a reality. I assure all of the group’s stakeholders that their confidence and efforts are not misplaced and that the group is looking forward to creating tremendous value in all seven jurisdictions.”

RFHL has established a new subsidiary in St. Lucia, Republic Bank (EC) Ltd. which will serve as the Head Office for the Eastern Caribbean operations, excluding Grenada. Scotia’s Grenada operations have been merged with the group’s existing subsidiary in Grenada, Republic Bank (Grenada) Limited. A new subsidiary has also been established in St. Maarten, Republic Bank (St. Maarten) N.V. to oversee the operations in that territory.

As indicated, when the transaction was first announced, there was no loss of jobs by staff in any country. President of the RFHL Group, Nigel Baptiste, welcomed all new team members saying, “The RFHL Group is built on our people, since we believe that is what differentiates us from any other financial institution. It was important to us that the people behind the success of Scotia’s operations in each country continued to be the main drivers of the success of our new operations in those countries. I am very pleased to welcome each of them to the Republic family and I look forward to their growth and ours, in the years and decades to come.”

Back in September the Bank of Guyana denied RBFH plans to take over the operations of Scotiabank in Guyana, Dr. Gobind Ganga had confirmed. Dr. Ganga, the Central Bank Governor, had told the Guyana Chronicle that both of the banks were informed of the decision. He said that the denial of the application for takeover by RBFH was due largely to the high level of concentration of the banking system, noting that “it would lead to systemic issues” which would have affected the health of the financial system here.

Dr. Ganga explained that the move would have led to lower cost efficiency, adding that it would have stymied competition in the sector here. He said Republic Bank would have had over 50 per cent assets and deposits in the local sector adding that it would have raised “major concerns” such as impact on competition.

Both banks have done very well in Guyana, Dr. Ganga said. He said the Republic Bank has played “a very good role in Guyana and this is why they would have wanted to advance their footprint.” However, he reiterated that the planned move would have had an adverse impact on the banking system. He said Scotiabank is free to sell their operations and with the evolving oil and gas industry here, it can take advantage of the opportunities which lay ahead.