RBC sells Eastern Caribbean banking operations

RBC sells Eastern Caribbean banking operations

Friday, December 13, 2019

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Royal Bank of Canada (RBC) announced yesterday that it has entered into definitive agreements to sell all banking operations in the Eastern Caribbean to a consortium of indigenous banks within the region.

The transaction is subject to regulatory approval and other customary closing conditions, and is expected to be finaliSed over the next few months.

The sale encompasses the branches of RBC in Antigua, Dominica, Montserrat, St Lucia, and St Kitts and Nevis, as well as regional businesses operating under RBC Royal Bank Holdings (EC) Limited in Nevis, Grenada and St Vincent and the Grenadines. Collectively, these operations are referred to as RBC Eastern Caribbean.

The consortium of five financial entities purchasing includes 1 st National Bank of St Lucia, Antigua Commercial Bank Limited, National Bank of Dominica Limited, the Bank of Montserrat, and Bank of Nevis Limited.

A consortium refers to a group made up of two or more individuals, companies, or governments that work together to achieve a common objective.

Rob Johnston, Head of RBC Caribbean Banking, indicated that earlier this year, RBC was approached by the consortium with a proposal to acquire all RBC Eastern Caribbean operations.

“After a review of our operations and strategy, we determined this opportunity was a good decision for the long-term future success of RBC Caribbean, and also, that it aligned with our vision to help our clients thrive and communities prosper. Consistent with our strategy of being a competitive leader in the markets where we operate, RBC is always evaluating opportunities for our business,” Johnston was quoted in a press release.

The consortium was advised by PricewaterhouseCoopers JA, led by Wilfred Baghaloo, who noted that the transaction is a demonstration that Caribbean countries and businesses have the capacity and capability to work together.

Johnathan Johannes, managing director of 1 st National Bank of St. Lucia also expressed similar sentiments.

“We formed the consortium for the express purpose of expanding the scale of the locally- owned financial entities in the Eastern Caribbean Currency Union. This transaction gives us the size and scale to play a more active role in the development of our respective countries. We see this transaction as the first step in achieving even greater synergies, efficiencies and cross-territory marketing opportunities. Self-determination is the highest level of empowerment — and the indigenous banks acquiring this business will now have an increased opportunity to influence the development of their communities,” said Johnston.

Financial terms of the transaction were not disclosed, however RBC indicated that it will release its first quarter 2020 results and host an earnings conference call on February 21, 2020.

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