Scotiabank announces sale of Guyana operation

…but central bank displeased with process

Scotiabank on Wednesday disclosed plans to sell its Guyanese operations to Trinidad-headquartered First Citizens Bank Limited (First Citizens or FCB), subject to regulatory approval.

However, the Canadian ‘Big Six’ bank did not indicate a sale consideration price.

“This transaction supports Scotiabank’s strategic decision to focus on operations across its footprint where it can achieve greater scale and deliver the highest value for customers,” the bank outlined in a release.

At present, Scotiabank operates four branches in Guyana and manages approximately 180 employees. The bank assured, though, that the staff complement will remain as is to support the bank’s operations even after the close of the transaction.

A Scotiabank location in Guyana (Photo: Stabroek News)

“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,” the

A leading financial services groups in the English-speaking Caribbean, First Citizens offers a full range of retail, corporate and investment banking services as well as wealth management, and brokerage services through its operations in Barbados, St Lucia, St Vincent and the Grenadines, and Trinidad and Tobago.

“The transaction supports First Citizens strategic growth across the region and leverages its strengths in innovation and excellence to the benefit of all stakeholders”, the release from Scotiabank also stated.

First things first

Notwithstanding the announcement, the Bank of Guyana — the regulatory authority for licensed financial institutions in the South American country — raised concern that First Citizens did not indicate its involvement in the transaction, though it published a notice in the Trinidad Guardian.

“The Bank of Guyana (BOG) notes that FCB entered the said agreement without informing the BOG,” it said in a release yesterday, adding: “FCB does not have a licence to operate in Guyana.”

Finance Minister Dr Ashni Singh (on the balcony, right) and Bank of Guyana Governor Dr Gobind Ganga (left) unveiling the 50th anniversary plaque displayed on the building. (Photo: Stabroek News)

The central bank also explained that, in keeping with the requirements of the Financial Institutions Act 1995, First Citizens needed first to submit an application to acquire control of a Scotiabank Guyana’s operation before the announcement.

Likewise, senior minister in the Office of the President with responsibility for finance, Dr Ashni Singh, noted his dissatisfaction with the manner in which both parties announcement was made.

Dr Ashni Singh, senior minister in the Office of the President with responsibility for finance (Photo: CMC)

He described the move by Scotiabank Guyana to announce the sale of its operations as “premature and inappropriate” since the Bank of Guyana had not yet given its approval for the transaction.

“Considering that the laws of Guyana require this process, we consider it premature to announce a transaction of this nature…” he stated, adding that the regulatory process to consider the request has not yet started.

The minister said the move also comes at an inconvenient time when the Guyanese economy is undergoing restructuring.

Still, Dr Sing explained that both the Government and the Bank of Guyana remain committed to ensuring there is a strong, vibrant, dynamic, and growing financial sector.

Scotiabank’s second attempt at sale

This is not Scotiabank’s first time trying to divest its operations in Guyana. Two years ago, the financial institution announced plans to sell its branches in Guyana and the Eastern Caribbean to another Trinidad outfit, Republic Bank Limited (RBL), as part of a wholesale deal.

Head office for Republic Financial Holdings Limited in Trinidad and Tobago. (File photo)

However, while the Scotiabank proceeded with the sale of its operations in Anguilla, the Commonwealth of Dominica, Grenada, St Kitts and Nevis, Saint Lucia, and St Vincent and the Grenadines, both the governments of Antigua and Guyana objected to the transaction.

In October last year, the Antiguan Government approved sale to the Eastern Caribbean Almagated Bank.