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…govt says announcement premature, deal subject to local regulations
Scotiabank on Wednesday said it has reached an agreement for the sale of its banking operations in Guyana to First Citizens Bank Limited (“First Citizens”), a move condemned by the Irfaan Ali administration, saying the announcement by the bank was premature.
It is the second time the Canadian-owned bank has tried to sell out its Guyana operations. A similar attempt was made back in 2019 when the bank tries to sell the operations to Republic Bank, but the then APNUAFC administration objected to it on the basis that Republic Bank would have controlled the banking sector.
In this new deal Scotiabank said the agreement is subject to regulatory approval and customary closing conditions. “This 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. Scotiabank’s current operations in Guyana encompass four branches and approximately 180 employees. Following closing, all employees will continue to support the business,” the bank stated.
According to the release, First Citizens is one of the leading financial services groups in the English-speaking Caribbean. Headquartered in Trinidad and Tobago, First Citizens offers a full range of retail, corporate and investment banking services as well as wealth management, trustee and brokerage services to clients through its operations in Barbados, Costa Rica, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago. The transaction supports First Citizens strategic growth across the region and leverages its strengths in innovation and excellence to the benefit of all stakeholders. “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 for the business.”
Meanwhile, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh has expressed his dissatisfaction with the decision by Scotiabank Guyana to announce the sale of its local operations. Minister Singh in a statement described the move by the Bank as “premature and inappropriate.” The Finance Minister said any such transaction is subject to a specified regulatory process. He said Government finds it unfortunate that the announcement was made, 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 pointed out.
“It is the intention of the Government of Guyana and indeed, it is the intention of the regulator and the supervisor of the financial sector, that is to say the Central Bank, to ensure that all applicable laws are complied with in the fullest and in particular, to ensure that appropriate processes of due diligence and other processes required under the laws of Guyana are initiated and concluded before any such transaction can be proceeded with,” the Finance Minister said.
“I wish to reiterate that we consider the announcement of this transaction to be both premature and inappropriate at the current time.”
Dr. Singh stressed that both Government and the Regulatory at the Bank of Guyana remains committed to ensuring there is a strong, vibrant, dynamic and growing financial sector. “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,” Dr. Singh underscored.
Additionally, Dr. Singh emphasised that the government remains firmly committed to ensuring that the interests of all depositors and customers of Scotiabank, and the broader financial sector, are safeguarded at all times.