Antigua-Barbuda warns that it will not issue vesting order for Scotiabank sale

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Prime Minister of Antigua and Barbuda, Gaston Browne

By Caribbean News Now contributor

ST JOHN’S, Antigua –Antigua and Barbuda Prime Minister Gaston Browne has advised the Eastern Caribbean Central Bank (ECCB) that his government will not be issuing a vesting order to facilitate the Bank of Nova Scotia’s divestment of its Antigua holdings about which there was no consultation.

The prime minister on Wednesday wrote to Timothy Antoine, the governor of the ECCB, which has regulatory responsibility for banks operating in Antigua and Barbuda’s domestic financial space.

In this letter, Browne told the ECCB governor: “At no stage was the government of Antigua and Barbuda consulted by the Bank of Nova Scotia nor was its agreement sought in this matter. The people of Antigua and Barbuda, including many persons holding deposits and other investment instruments with the bank, learned of this divestment scheme through a media release.”

Declaring that “This matter has implications for the integrity of the banking system in Antigua and Barbuda and, indeed, for the stability of the Eastern Caribbean Currency”, the prime minister advised the Central Bank governor that “the government of Antigua and Barbuda has concluded that the divestment announced by the Bank of Nova Scotia is not in the overall interest of our country and our people”.

Copying his letter to colleague heads of government of ECCB member countries, some of which are similarly affected, the Antigua and Barbuda prime minister advised the Central Bank governor that “until other options for divestment are explored, particularly providing a consortium of local banks the right of first refusal to acquire the Antigua and Barbuda operations, the government of Antigua and Barbuda will not issue a vesting order”.

Republic Bank’s announcement on Tuesday that it has entered into an agreement to acquire Scotiabank’s operations in Guyana and eight other Caribbean territories has left officials at Central Bank worried about the troubling ramifications of this move.

In Guyana, officials told local media that Republic Bank cannot purchase Scotia’s banking operations without Central Bank approval, which will entail a thorough due diligence process.

According to Kaieteur News, Central Bank executives said that Republic Bank has not submitted an application for approval regarding its move to acquire Scotia’s operations in Guyana.

Central Bank governor, Dr Gobind Ganga, said that when Republic Bank makes its application, several processes will have to be implemented to ensure that the financial institution abides by the requirements and criteria set out in the Financial Institutions Act.

Ganga said that he will be engaging his counterparts in the other regions where Republic Bank would be acquiring the banking assets of Scotiabank.

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5 COMMENTS

  1. I have to agree with the government of Antigua and Barbuda in their objections to the sale of Scotia Bank to Republic. It appears that the trend of ‘we’ West Indians is that we are always giving up something for which we get little in return. We act as though we are still on the plantation and we have to accept that which is doled out to us. I am happy to see one of our West Indian brothers finally saying that this will not work. What do we know about Republic? Who owns it? And what’s to stop them from coming in and having a fire sale of all the properties that they will supposedly acquire and I am including my own homeland of Anguilla in this mix. I already have an issue with the so-called asset management company created by our lame and ineffective Central Bank to liquidate Anguilla. What is wrong with our people. We give these carpetbaggers carte blanche to come in and do whatever the hell they want at our expense. Where are those budding Karl Hudson Phillips when we need them? Kudos to the Prime Minister Mr. Browne of Antigua and Barbuda. I’m interested to see what my own Chief Minister Mr. Banks is willing to do. Hopefully he will have found his balls this time. After the debacle of NBA and CCB, their offshore subsidiaries, and all the people whose shares were obliterated, and the offshore depositors whose money is still frozen somewhere in New York, may, just maybe this time he will stand his ground and side with the people of Anguilla.

  2. Republic Bank being a US Bank must abide by US laws, so does that mean its Caribbean customers will have US guarantees, I doubt that. But we are likely to have more US requirements imposed on us. Will Republic Bank be allowed to remove cash from our banks to the US? Will Republic Caribbean be multiple separate independent subsidiaries of Republic? In the Caribbean we have several Central Banks. Will Republic be prevented from making non-Caribbean loans? Can we guarantee all Caribbean derived monies will remain in the Caribbean? Do not expect US monies would be available to us for loans, that is against US laws. US bankers are governed by people with bad attitudes as can be seen by what Wells Fargo and Bank of America do to their customers, so Caribbean Governments and Central Banks need to take a hard look before they allow a take over.

  3. Welcome to the wierd and wonderful (not) world of neo-colonialism.

    Unfortunately for the concerned pipsqueak countries, at the end of the day they will have to bow down and accept anything these banks do because they have no political leverage or economic power to do otherwise except take over these relativelytroubled assets and run them further into the ground.

    The Bank of Nova Scotia announced several years ago that it was planning to exit many Third World locations so none of this should come as a surprise. The obvious reason was the poor economic performance of the banks in these countries compared to elsewhere, a business decision that is theirs and theirs alone to make.

    Just another example of the helplessness and powerlessness of the region’s micro-states.

    • Just out of curiosity, what purpose do the Canadian commercial banks serve in our countries why you seem to regard their being here as anything other than a favour to them?? They made a KILLING giving consumer loans for cars, boats and all kinds of consumption, but NEVER had a lending policy that was concerned with business development. My cousin recently was approached by his (Scotiabank) manager who was keen to offer him $80,000 for a new SUV (having seen how much cash his beach bar was raking in), but when he instead requested a loan to expand the beach bar itself was outright refused!!!

      Why is it that your narratives always characterize outsiders as all-powerful, rather than just GREEDY. The foreign banks’ only power comes from the stupidity of our politicians who allow them to operate in our countries in the first place. Why should a Canadian bank with lending policies like that described above be PERMITTED (much less begged) to operate in competition with our own home-grown money lenders who are VERY capable of performing the same role of dead end consumer lending and are better for mortgage lending?

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