Scotiabank's main branch in Basseterre St. Kitts.

By: Precious Mills

BASSETERRE, St.Kitts (November 2018)-News broke earlier this week that Scotiabank (out of Canada) has entered into an agreement to sell its Caribbean operations; a move that has prompted heavy criticism of concern in Guyana and also the neighbouring island of Antigua to date.

This media house contacted and briefly spoke with the Managing Director of Caribbean East for Scotiabank David Parks in Barbados who has agreed to do an interview.

Attempts to reach the Chamber of Industry and Commerce (in St.Kitts) for a comment were unsuccessful.

A press release issued on Tuesday this week (27th November), spotlighted Scotiabank’s announcement of a new partnership to deliver enhanced insurance services in Jamaica and Trinidad & Tobago and to refocus its Caribbean operations by divesting operations in nine (9) countries including the Federation.

As understood, Republic Financial Holdings Limited is expected to acquire Scotiabank’s Banking Operations in Anguilla, Antigua, Dominica, Grenada, Guyana, St. Kitts & Nevis, St. Lucia, St. Maarten, St. Vincent & the Grenadines.

“Scotiabank today announced agreements with respect to certain of its Caribbean operations, as part of its strategy to focus the Bank’s efforts on its core markets with significant scale,” part of the statement read.

It continued: “As part of this strategy, Scotiabank’s subsidiaries in Jamaica (Scotia Group Jamaica Limited, “Scotiabank Jamaica”) and Trinidad & Tobago (Scotiabank Trinidad & Tobago Limited, “Scotiabank Trinidad & Tobago”) announced that they will enter into a 20-year distribution agreement with Sagicor Financial Corporation Limited (“Sagicor”) through which an enhanced suite of market-leading insurance products and solutions, underwritten by Sagicor, will be offered to Scotiabank customers in Jamaica and Trinidad & Tobago. As part of this partnership, Scotiabank Jamaica and Scotiabank Trinidad & Tobago have entered into agreements to sell their respective insurance subsidiaries: Scotia Jamaica Life Insurance Company and ScotiaLife Trinidad and Tobago Limited to Sagicor.”

“These agreements are subject to regulatory approval and customary closing conditions. The transaction is also subject to the closing of the announced transaction whereby Sagicor will be acquired by Alignvest Acquisition II Corporation subject to conditions in and pursuant to a plan of arrangement and the surviving entity will continue the Sagicor brand and be publicly-listed on the Toronto Stock Exchange.”

The statement went on to indicate that: “Scotiabank has also entered into an agreement to sell its banking operations in 9 non-core markets in the Caribbean (Anguilla, Antigua, Dominica, Grenada, Guyana, St. Kitts & Nevis, St. Lucia, St. Maarten, St. Vincent & the Grenadines) to Republic Financial Holdings Limited (“RFHL”). The agreement is subject to regulatory approvals and customary closing conditions.”

It was also communicated that these transactions are not financially material to Scotiabank.

“Scotiabank’s common equity tier one capital ratio will increase by approximately 10 basis points on closing. Until such approvals are obtained and conditions are met, and the transactions close, all Scotiabank operations in these countries will continue as usual.”