Scotiabank reaches agreement to sell local operations to T&T bank
…announcement “premature”, “inappropriate” – Finance Minister
…process for Govt’s approval not initiated
Scotiabank, which has for some time been looking to sell its operations in Guyana, has reached an agreement with the Trinidad and Tobago-based First Citizens bank to sell its operations. This is despite the fact that Government approval has yet to be granted.
Scotiabank made the announcement on Wednesday, noting that after it sells its operations, all of its approximately 180 employees would remain to continue supporting operations in its four local branches.
According to Scotiabank’s statement, the transaction supports First Citizens’ strategic growth across the region, and leverages its strengths in innovation and excellence to the benefit of all stakeholders.
“Until regulatory approvals are obtained and the transaction closes, Scotiabank’s operations in Guyana will continue as usual. First Citizens and Scotiabank will work together to facilitate a smooth transition for the business,” Scotiabank has said, adding that First Citizens is one of the leading financial services groups in the English-speaking Caribbean.
Headquartered in the Republic of Trinidad and Tobago, First Citizens offers a full range of retail, corporate and investment banking services, as well as wealth management, trustee and brokerage services to clients through its operations in Barbados, Costa Rica, St Lucia, St Vincent and the Grenadines, and Trinidad and Tobago.
Approval not initiated
Meanwhile, Senior Minister with responsibility for Finance, Dr Ashni Singh, in a video broadcast on Wednesday, noted that the “sale” has only just been brought to his attention.
According to Minister Singh, Scotiabank’s announcement is both premature and inappropriate when one considers the regulatory approvals that have to be granted before the bank can sell its operations.
“I wish to say that the Government of Guyana considers it extremely unfortunate that this transaction was announced, considering that any such transaction is subject to a specified regulatory process.
“In particular, Section 12 of the Financial Institutions Act stipulates that no financial institution may transfer the whole or a substantial part of its operations in Guyana without the prior approval of the Bank of Guyana.
“We consider it premature to announce a transaction of this nature, particularly given that the regulatory process to consider the request for such a transaction is yet to be initiated, much less concluded,” Minister Singh said.
The Minister noted that both the Government and Central Bank intend to ensure that the law is complied with in its entirety, and that due diligence is carried out before Scotiabank can sell its operations.
“I wish also to reiterate that both the Government of Guyana and Central Bank remain firmly committed to maintaining a strong, vibrant, dynamic, and growing financial sector.
“Particularly at this junction of our economic history, it is important that the financial sector is adequately equipped to meet the needs of our evolving economy, which, as viewers would know, is currently going through dramatic changes.”
In this regard, he added that the primary objective remains the preservation of a strong and stable financial sector, one that is dynamic and competitive and can meet the needs of Guyana’s economy.
In 2019, Scotiabank’s attempts to sell its operations in Guyana to Republic Financial Holdings Limited came to a screeching halt when the Bank of Guyana denied its application.
Besides Guyana, Scotiabank was also looking to sell its operations in St Maarten, Anguilla, St. Kitts and Nevis, Antigua and Barbuda, Grenada, Dominica, St Lucia, and St Vincent and the Grenadines.
At the time, Governor of the Central Bank of Guyana, Dr Gobind Ganga, had told Guyana Times that the application was denied in light of concerns about “concentration” and “competition”, which would have negative impacts on the country’s financial system.