The Caribbean’s biggest financial holding company is getting bigger

Despite the objections raised by the Central Bank of Guyana and the Government of Antigua and Barbuda to the purchase of  Scotiabank’s  operations in those territories, Republic Financial Holdings Limited (RFHL) Bank is set to continue to hold its number one position within the Caribbean as the largest concern of that type.

 On September 11, Republic Financial said it was “now one step closer to expanding its reach within the Caribbean region,” with the  Eastern Caribbean Central Bank (ECCB) approval of the application for the transfer of the assets and liabilities of the Bank of Nova Scotia (BNS) to RFHL in Anguilla, the Commonwealth of Dominica, Grenada, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines, pursuant to Section 43 of the Banking Act of 2015 that governs the various territories.

The ECCB commented that it believed that the corporate banking record of the Republic Group and its extensive network of correspondent banks would bode well for the Eastern Caribbean Currency Union (ECCU) banking sector. 

Previous approvals include a letter of “No Objection” from the Central Bank of Curacao and St. Maarten and approval from the Central Bank of Trinidad and Tobago (CBTT).

On conclusion, the deal, for RFHL, will add to another acquisition made earlier this year it closed on Cayman National Corporation (CNC, publicly traded on the Cayman Islands Stock Exchange.)

That transaction comprised the purchase of 74.99 per cent of the issued shares in CNC at an offering price of US$6.25 per share by RFHL’s Barbadian subsidiary, Republic Bank Trinidad and Tobago (Barbados) Limited. As a result of this transaction, the asset base of the RFHL Group will increased to approx. US$12 billion. 

The CNC Group has five subsidiaries: Cayman National Bank Ltd., Cayman National Fund Services Ltd., Cayman National Securities Ltd., Cayman National Bank (Isle of Man) Limited, and Cayman National (Dubai) Ltd. 

It is the largest financial services company based in the Cayman Islands, providing banking, trust and company management, fund administration, and wealth management services to clients in the Cayman Islands and around the world. 

S&P Global Market Intelligence indicates that as at March 31, 2019, Republic Financial Holdings Limited, headquartered in Trinidad and Tobago, climbed to the number one position in the Caribbean region with total assets of US$14.96 billion.

 In second place for the Caribbean, with total assets of US $11.4 billion as at March 2019, was First Caribbean International Bank Limited in Barbados.

Within the region, another contender for first rankings is the NCB Financial Group Limited which had assets, at March 2019, of J$970.8 billion or TT $941, 277, 597.84 ($J$100 equals TTD$5.09.)

RFHL is 14 times the size of NCB Financial Group, by assets.

Acquisitions recently closed by NCB Financial include Guardian Holdings and Clarien Bank.

In Guyana, authorities based their objection to the potential sale of BNS’s operations to RFHL on the basis of market concentration. Republic Bank (Guyana) Ltd. already holds 35.4% of Guyana’s banking system assets and 36.8% of its deposits; the deal with Scotiabank would push both of those figures to 51%.

There have also been concerns about potential job losses and correspondent banking options. In Antigua and Barbuda, the concern of the government was that the buyer was not local and had breached protocol.

Republic Financial’s CEO Nigel Baptiste has said that the Scotiabank deal, which comes on heels of the Cayman National Bank Ltd acquisition, is part of an ongoing strategy to diversify the company’s income streams and strengthen the currencies in which it operates.

 Baptise made it clear that RFHL,’s will continue to pursue its goal of expanding into other territories across the Caribbean, including Bermuda, the Bahamas, Jamaica, the U.S. Virgin Islands and Turks & Caicos.