Guyana’s Finance Minister Dr Ashni Singh has chastised Scotiabank’s “premature and inappropriate” announcement on Wednesday that it will sell its Guyanese assets to Trinidad and Tobago-based First Citizens bank.
In a statement from the Department of Public Information, hours after Scotiabank’s announcement, Singh said the government found the announcement unfortunate, “since section 12 of the Financial Institutions Act stipulates no financial institution may transfer the entire or a substantial part of its operations without prior approval from the Bank of Guyana.
“Considering that the laws of Guyana require this process, we consider it premature to announce a transaction of this nature, particularly given that the regulatory process to consider the request for any such transaction is yet to be initiated, much less to be concluded,” the minister said.
Singh said the Guyanese government and its Central Bank would ensure that the laws of the country and the appropriate due diligence were followed before the transaction could proceed.
He added that the government and the Bank of Guyana remained committed to ensuring a strong, vibrant, dynamic and growing financial sector in the country.
“Particularly at this juncture at our economic history, it is important the financial sector is adequately equipped to meet the needs of our evolving economy which is currently going through dramatic changes. In this regard, our primary objective remains the preservation of a strong and stable financial sector and one that is dynamic and competitive and can meet the needs of our economy.”
Singh said the government was committed to ensuring that the interests of all depositors and customers of Scotiabank, and the broader financial sector were safeguarded.
Scotiabank, a Canadian multinational, did say in its statement announcing the decision that the agreement was subject to regulatory approval and customary closing conditions. The value of the transaction was not stated.
The transaction supports Scotiabank’s strategic decision to focus on operations across its footprint where it can achieve greater scale and deliver the highest value for customers, the bank said.
Scotiabank’s current operations in Guyana include four branches and approximately 180 employees, who will remain with the bank even after the transfer.
The transaction supports First Citizens’ strategic growth across the region and leverages its strengths in innovation and excellence to the benefit of all stakeholders, the release said. First Citizens, in which the TT government has just over 55 per cent ownership, does not currently have a presence in Guyana. In a brief statement, the bank’s head of branding and marketing Larry Olton said the bank’s board made the decision on Wednesday to buy Scotia’s operations in Guyana, subject to regulatory approvals and customary closing conditions. He added that this was all the bank would say for the time being.
Until regulatory approvals are obtained and the transaction closes, Scotiabank’s operations in Guyana will continue as usual. First Citizens and Scotiabank will work together to facilitate a smooth transition, the release said.
Scotiabank has been reducing its footprint in the Caribbean. In 2019, it sold its Eastern Caribbean assets to Republic Financial Holdings Ltd. That same year, the Bank of Guyana denied Republic’s attempts to buy the Guyanese assets, with governor Dr Gobind Ganga stating that, had it gone through, Republic would have had over 50 per cent ownership of the assets and deposits in the Guyanese financial sector, which would have raised major concerns, such as impact on competition.