THE Government is aware of some Caricom governments’ concerns over Republic Bank’s proposed acquisition of Scotiabank’s assets in Guyana and the Eastern Caribbean and will engage the financial giant in conversation to understand the transaction better.
At the post-Cabinet media briefing Thursday, Communications Minister Stuart Young said, “We, as a Government, have taken very careful note of what some of our brother and sister Caricom countries are saying with respect to this deal, and the complaints that they have made.” The government is the bank’s largest shareholder, owning 51 per cent of shares received as part of the Clico bailout settlement. About half of those shares are vested in the Clico Investment Fund and the rest in the National Investment Fund.
“I have also heard Republic Bank’s side, saying that all of these contracts, all of these transactions are always subject to the approval of regulators,” Young continued. “They are going through that process now. That is really a Republic Bank question.”
The deal will cost an estimated US$123 million. Republic is also in negotiations to acquire the majority share in Cayman National Bank.
Almost immediately after the surprise announcement on Tuesday, the governments of Antigua and Guyana reacted negatively, concerned about the bank’s reach and influence. Antigua, in particular, claimed that neither Republic nor Scotiabank sought that country’s approval and suggested it would be withheld. In Guyana, where the bank already has a presence, its market share will grow to 51 per cent, leading that country’s Finance Ministry to voice its concerns about “too big to fail” risks.
In an advertisement in today’s newspaper, Republic said it was “committed to serving the Caribbean,” a product of the bank’s longstanding commitment to supporting the growth and development of the region.
The acquisitions, Republic’s chairman Ronald Harford said in the advertisement, will create more opportunities for regional growth, as well create a stronger, more resilient company with assets of US$15 billion. Along with TT, Republic has a presence in six territories, including Ghana and Cuba. Should this deal be approved, that would increase to 14 territories.