Scotiabank’s agreement of sale with T&T’s First Citizens Bank mutually terminated

More than a year after announcing that it has sold its operations in Guyana to Trinidad-based First Citizens Bank (FCB), Scotiabank has now said that the sale has fallen through.
In a brief statement on Thursday, Scotiabank explained that the agreement for the sale of its banking operations in Guyana to First Citizens Bank Limited has expired. Consequently, it noted, “The agreement has been terminated in accordance with its terms.”
Meanwhile, the Trinidad-based Bank also published a legal notice confirming that the Purchase and Sale Agreement for the sale of Scotiabank’s retail operations in Guyana expired and the agreement has been terminated in accordance with its terms.
“First Citizens remains resolved to advance our geographic diversification and digital transformation strategies. These efforts will increase our shareholder value by the active progression of all strategic options to expand our core commercial banking and other lines of business into new markets and territories while we continue to deliver digital products, channels, and services to the markets that we serve,” First Citizens Bank noted.
Nevertheless, the Canada-based Scotiabank said it “…remains committed to providing the highest level of customer service and quality banking solutions to our customers in Guyana and across the Caribbean.”
For several years now, Scotiabank has been looking to sell its operations in Guyana. It first announced plans to sell to FCB in March 2021.
FCB had published a notice in the Trinidad Guardian on its decision to enter into a purchase and sale agreement with Scotiabank to purchase its operations in Guyana. Scotiabank, in a subsequent statement, had stated that the agreement is subject to regulatory approval and customary closing conditions.
At the time, however, the Bank of Guyana (BoG) had contended that not only did FCB and Scotiabank enter the agreement without informing the Central Bank but the Trinidadian bank did not have a licence to operate in Guyana in keeping with the requirements of the Financial Institutions Act 1995 (FIA).
Central Bank Governor, Dr Gobind Ganga, had told Guyana Times that Scotiabank needed permission from the Bank of Guyana before it enters into any agreement to sell its operations here, in accordance with Section 12 of the FIA.
“They can’t sell, transfer, or anything before they get permission from the Bank of Guyana. That’s a requirement… Their sale is subject to our approval,” he had contended.
This, Dr Granga explained, is to allow for the Central Bank to conduct the necessary mandatory assessments of the transaction, including in this case the company seeking to enter Guyana’s banking market.
“We have to do our assessments with respect to the requirements, and those requirements include our objectives in terms of what we need from another financial institution entering the Guyana market… We have to do our assessment from different perspectives…Any applicant will have to judge with respect to the merit of the application from the perspective of our requirements and our objectives going forward,” the Central Bank Head had stated.
Meanwhile, last year’s announcement of the sale between the two banks was described as premature and inappropriate by the Guyana Government.
Senior Minister with responsibility for Finance, Dr Ashni Singh, had said at the time 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… 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.”
This attempt to sell to FCB was Scotiabank’s second try to exit the Guyana market. In 2019, the Canadian-based bank had its application to sell to Republic Financial Holdings Limited denied by the BoG.
At the time, Dr Ganga, had told Guyana Times that the application was rejected in light of concerns about “concentration” and “competition”, which would have negative impacts on the country’s financial system. He pointed out that in its assessment, the Central Bank found that if the transaction had gone through with RBL, which is already operating in Guyana, then it would have jeopardised the local market.
Scotiabank’s Guyana operations currently encompass four branches and approximately 180 employees.