Antigua PM invites Scotiabank officials for talks on proposed sale to Trinidad bank

Friday, December 14, 2018

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ST JOHN'S, Antigua (CMC) — The Antigua and Barbuda government is seeking a meeting with senior officials of the Bank of Nova Scotia by January 7 next year to discuss the sale of the bank's branch holdings on the island.

Prime Minister Gaston Browne has sent a letter to Scotiabank's branch manager here, Suzan Snaggs-Wilson, inviting the competent authorities to discuss the sale proposal.

Last month, the Trinidad-based Republic Financial Holdings Limited (RFHL) announced that it is seeking to acquire Scotiabank operations in several Caribbean countries.

Antigua and Barbuda and Guyana have expressed reservations about the proposed acquisition, with St John's indicating that it would not be issuing a vesting order to facilitate the move.

A RFHL statement said that the banks being acquired are located in Guyana, St Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.

It said that the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.

In his December 13 letter, Prime Minister Browne said that the proposed meeting would be between high officials of the Bank of Nova Scotia and representatives of a “consortium comprising the Government, local banks and other qualified and competent local institutions” desirous of purchasing Scotiabank's branch holdings in Antigua.

“The purpose of the meeting would be to discuss the parameters of the sale which would not necessarily exclude participation by any regional entity approved by the Government and the regulatory authorities”.

In the letter in which he outlined the government's position on the proposed sale, Prime Minister Browne said that his administration wanted to make it “clear that its primary concern is to build resilience in the local banking sector and reduce its vulnerability to de-risking strategies employed by foreign owned entities that weaken our national capacity to participate in the global financial and trading system effectively.

“It is important that the ownership of the vital banking sector be re-balanced to improve the strength and capacity of local shareholding. This in no way affects foreign-owned banks that now operate in Antigua and Barbuda,” Browne said in the letter, which was also copied to the RFHL chairman.

Browne also said that the Bank of Nova Scotia's decision to sell its branch holdings “provides the opportunity for strengthening the local banking sector, improving their members' resilience, and enhancing the nation's utilisation of its own wealth, including keeping profits at home for re-investment in economic growth and social development”.

The Suriname-based CARICOM Competition Commission (CCC) has already said that any impact the proposed acquisition of Scotiabank by RFHL would be assessed in accordance with the Revised Treaty of Chaguaramas (RTC) that governs the regional integration movement.

The CCC, which was established by Article 171 of the RTC, is mandated to promote and protect competition within the Community and according to its chairman, Justice Christopher Blackman, in its monitoring of business activity in the CARICOM Single Market and Economy (CSME), it has taken note of the planned sale.

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