Eastern Caribbean Central Bank approves sale of Scotia in 6 countries
The sale of Scotiabank to Republic Financial Holding Limited (RFHL) has been approved in six Eastern Caribbean countries as discussions continue between the Canadian bank and the Government of Antigua and Barbuda.
The Eastern Caribbean Central Bank (ECCB), in consultation with the ECCB Monetary Council, has approved the application for the transfer of the assets and liabilities of the Bank of Nova Scotia (BNS) to RFHL in Anguilla, Dominica, Grenada, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines, pursuant to Section 43 of the Banking Act.
A release from the ECCB said its Monetary Council met on September 6, via videoconference, to discuss the ECCB’s assessment of the RFHL's application to acquire the Bank of Nova Scotia’s operations in ECCB member countries.
The ECCB undertook a review of the proposed transaction to assess the following:
1. The RFHL’s Strategic Plan 2018-2020;
2. The financial condition of RFHL to support the operations of the acquired banking business of BNS, as well as all of RFHL’s subsidiaries;
3. The implications for the stability of the ECCU banking system
4. The technical/human resource capacity of RFHL to effectively govern its subsidiaries across multiple jurisdictions.
In completing its assessment, the ECCB said it consulted with the Central Bank of Trinidad and Tobago (CBTT), RFHL’s home regulator.
The approval granted to the RFHL is subject to the condition that RFHL will be required to make a stake of its ECCU operations available to the people of the ECCU through approved ECCU entities.
The ECCB said it is in the process of communicating the requirements for finalisation of the transaction between RFHL and BNS and will continue to monitor the process to ensure full regulatory compliance.
"The ECCB believes that Republic Bank’s corporate banking record and its extensive network of correspondent banks will bode well for the ECCU banking sector. The ECCB is resolute about its mandate to protect the EC dollar and will continue to maintain high levels of foreign reserves while protecting the stability of the banking system. Citizens and residents in ECCB member countries are encouraged to stay abreast of developments in the financial sector," the organisation said in the release.
Commenting on the ECCB's approval, Gaston Browne, Prime Minister of Antigua and Barbuda, said his ultimate preference would have been for all the OECS countries to come together and buy all the branches of Scotiabank. However, he said, he is of the view that his Government has taken a superior decision to have the first right of refusal to use those assets to build greater resilience in the domestic banking sector.