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Scotiabank Officials And Antigua Prime Minister To Meet To Discuss Sale Of Subsidiary On The Island

The Scotiabank branch in Antigua and Barbuda.

Scotiabank Officials And Antigua Prime Minister To Meet To Discuss Sale Of Subsidiary On The Island

ST. JOHN’S, Antigua and Barbuda, January 6, 2019 (CMC) – The Antigua and Barbuda government said, last Friday, that a meeting with officials of the Bank of Nova Scotia will take place this month, after initially indicating that the bank had turned down the request for the talks, regarding the sale of its branch holdings on the island.

Government Chief of Staff, Lionel ‘Max’ Hurst, speaking on Point FM, a radio station owned by Prime Minister, Gaston Browne, last Thursday night, had said that the general manager of Scotia Bank Antigua, Mrs. Suzan Snaggs-Wilson, had responded to Prime Minister Browne’s request for the meeting, originally scheduled for January 7.

“In essence she said there was hardly any need for the Scotiabank officials to meet with the government of Antigua and Barbuda, because they had entered into an agreement with a private enterprise to purchase the assets and liabilities of Scotiabank Antigua and, as far as they were concerned, it was a done deal,” he revealed.

He told radio listeners that the bank had indicated, “if the purpose of the meeting was to discuss that deal, they didn’t seem to be any purpose to it”.

In November last year, the Trinidad-based Republic Financial Holdings Limited (RFHL) announced that it was 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, requesting the meeting, Prime Minister Browne said that the proposed talks 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.

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.

Hurst told radio listeners that it was “out of courtesy that the government was in the first place meeting” with the bank, adding “we knew that they had done exactly what they had written in the letter and the granting of the necessary permission as it were…for the new bank to operate in Antigua is entirely dependent on the prime minister. He has to grant what is called a vesting order”.

But speaking on Observer Radio, last Friday, Hurst said that the Scotiabank manager has agreed to meet with Prime Minister Browne.

“The prime minister did indeed write to Scotiabank, seeking a meeting and Scotiabank general manager responded, by indicating that she would be willing to meet in January, and so we have proposed the date…and we are hopeful that it will find the Scotiabank and the Republic Holdings Financial company also in a position to meet on that date,” he said.

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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