Prime Minister: Acquisition of Bank of Nova Scotia not surprising 

Scotia Bank St Georges branch

by Curlan Campbell, NOW Grenada

  • Prime Minister Mitchell not unhappy to see a Caribbean institution playing bigger role in country’s banking system
  • Acquisition announced on Tuesday by Chairman of RFHL, Ronald Harford

Despite concerns raised regarding the acquisition of the banking operations of the Bank of Nova Scotia by Republic Financial Holdings Limited (RFHL), Prime Minister Dr Keith Mitchell has welcomed the acquisition stating, “I am not unhappy to see a Caribbean institution playing an even bigger role in the banking system in this country.”

Dr Mitchell’s comments came as news of the acquisition was announced on Tuesday by Chairman of RFHL, Ronald Harford. He said the news came as no surprise based on the trends in the region. “If one understood what was happening in the region that was not something we can say that surprised us. It didn’t surprise me, and I did indicate when I heard certain comments made not long ago by a leading director from the Bank of Nova Scotia when I asked about the investment and his answer he gave, I am not surprised with the results I saw today.”

According to a release from Republic Financial Holdings Limited, the purchase price is US$123 million, which represents US$25 million consideration for a total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining 8 countries. This price does not include any amounts required to capitalise the branches post-closing. The agreement, executed on 27 November 2018 signalled the commencement of a transaction that is subject to all regulatory and other customary approvals and conditions.

Dr Mitchell says although he believes in the existence of competition within the banking sector, with the acquisition there will still be diversity in the sector. “I always believe in a lot of competition, and while we see less competition, the fact is we still have diversity in the banking sector. The Cooperative Bank is the largest bank in the country, but I am not sure with the acquisition of Nova Scotia shares whether Republic now becomes larger than Cooperative Bank, but right now the Cooperative Bank is the largest bank, and it happens to be not just Caribbean owned, but locally owned.”

Letter to General Manager of Scotiabank Antigua, Suzan Snaggs-Wilson from the government of Antigua and Barbuda

The government of Antigua and Barbuda, in a letter to the General Manager of Scotiabank Antigua, Suzan Snaggs–Wilson stated, “I hereby inform the authorities of the Bank of Nova Scotia, through you, 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.”

“Please be advised, therefore, that my 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 assets and investments of local clients.”

RFHL has acquired Scotiabank’s banking operations in Guyana, St Maarten and the Eastern Caribbean territories, including Anguilla, Antigua, and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

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