Dominica is among nine Scotia Bank operations in the Caribbean which are being sold to Trinidad and Tobago-based Republic Financial Holdings Ltd. (RFHL)
The others are Anguilla, Antigua and Barbuda, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. RFHL is also purchasing operations in Guyana and St. Maarten.
Bank of Nova Scotia said Tuesday that it has struck a deal to sell banking businesses in nine of the smaller countries in the Caribbean, such as Antigua and Dominica, as the lender continues to narrow down the number of international markets in which it does business.
The move comes as Scotiabank, which has said larger markets in Latin America are still very much part of its plans, reported that profit at its international unit grew at a greater rate than at its Canadian business over the past year.
“Exiting these non-core operations is consistent with a strategy that began five years ago to sharpen our focus, increase scale in core geographies and businesses, improve earnings quality and reduce risk to the bank,” said Scotiabank president and CEO Brian Porter during a conference call Tuesday morning, adding that the bank has now either exited or announced its intentions to exit more than 20 countries or businesses over that same period.
RFHL said in a release that it had begun the process of purcahsing the Scotiabank operations by signing a Share Purchase Agreement for the total sum of US$123,000,000, “which represents a premium of US$ 98 million for operations in six (6) Eastern Caribbean jurisdictions, St. Maarten and Guyana, plus a US$ 25 million consideration for the total shareholding of Scotiabank Anguilla.” According to the release, this price does not include any amounts required to capitalise the branches post-closing.
It said further that completion of this transaction is subject to all regulatory and other customary approvals, and conditions.
“Once approved, our expanded presence or entrance in these territories will both add value to the individual markets and redound to the benefit of the Group (RFHL). The Group’s asset size will increase by approximately US$ 2.5 billion and the transaction will be accretive to the earnings of the Bank by approx. USD$0.20 per share,” RFHL stated.
It added that the acquisition will also expand the physical presence of the Group from 117 branches to 139 branches across all regions and add over 600 staff members to the Republic family.
“This is an exciting opportunity for the Group as it affords us the opportunity to grow our market share in the Eastern Caribbean and Guyana, two markets we are familiar with, and build new relationships in St. Maarten. We will keep you informed on its progress.
Republic Financial is the registered owner of all of the Banks in the Republic Bank Group. These include the Republic Bank Limited, Republic Bank (Guyana) Limited, Republic Bank (Barbados) Limited, Republic Bank (Grenada) Limited, Republic Bank (Suriname) Limited, HFC Bank (Ghana), as well as Republic Securities Limited and other subsidiaries.
It is unclear at this point as to what implications this acquisition of Scotiabank’s operations in the Eastern Caribbean will have for Scotiabank in Dominica.