Republic Financial to acquire Scotiabank’s banking operations in nine Caribbean countries; not so fast, says Antigua-Barbuda PM

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By Caribbean News Now contributor

ST JOHN’S, Antigua — Republic Financial Holdings Limited (RFHL) announced on Tuesday that it has agreed to acquire Scotiabank’s operations in the Eastern Caribbean, including Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines, as well as operations in Guyana and St Maarten.

However, Scotiabank has been stopped from proceeding with any sale of its operations in Antigua and Barbuda until application is made to the government and approval given.

Antigua and Barbuda Prime Minister Gaston Browne also wants assurances that local banks will be given priority to purchase the Scotiabank’s operations in Antigua, and that local customers’ investments and saving will be protected.

RFHL is the owner of all of the banks in the Republic Bank Group – Republic Bank Limited, Republic Bank (Guyana) Limited, Republic Bank (Barbados) Limited, Republic Bank (Grenada) Limited, Republic Bank (Suriname) Limited.

“Today, we began the process by signing a share purchase agreement for the total sum of US$123,000,000, which represents a premium of US$98 million for operations in six Eastern Caribbean jurisdictions, St Maarten and Guyana, plus a US$25 million consideration for the total shareholding of Scotiabank Anguilla Limited. This price does not include any amounts required to capitalise the branches post¬closing,” RFHL said in a notice to staff.

RFHL said its expanded presence or entrance in these territories will both add value to the individual markets and redound to the benefit of the group. The group’s asset size will increase by approximately US$2.5 billion and the transaction will add to the earnings of the bank by approximately US$0.20 per share. The acquisition will also expand its physical presence from 117 branches to 139 branches across all regions and add over 600 staff members.

Writing on Tuesday to Suzan Snaggs-Wilson, the general manager of Scotiabank in Antigua, Browne lamented the fact “that the authorities of the Bank of Nova Scotia would decide to sell its operations in Antigua and Barbuda without any form of consultation with the regulators or the finance minister whose agreement and authority for such a sale are required by law”.

In his letter, the prime minister declared: “I hereby inform the authorities of the Bank of Nova Scotia that their decision to sell the operations in Antigua and Barbuda, without the requisite consultation and agreement of the regulators and the government of Antigua and Barbuda, is unacceptable”.

Having told Scotiabank that, should it wish to divest its operations in Antigua and Barbuda, “it would be necessary to seek the government’s approval”. The prime minister went on to express his government’s desire for “such divestment to be offered first to local banks as the priority”

He also disclosed that, “notwithstanding the unexpectedness of Bank of Nova Scoria’s announcement, a consortium of such banks has already expressed an affirmative interest to acquire”.

Browne stated that his government “now expects a formal application by the authorities of the Bank of Nova Scotia for the terms of any divestment, including a reasonable time to identify new local owners, and assurances of the safety of the assets and investments of local clients”.

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