Royal Bank of Canada announced it has entered into a definitive agreement to sell all banking operations in the Eastern Caribbean to a consortium of local banks in the region.
The deal is expected to be finalised in the coming months, subject to regulatory approval and other customary closing conditions.
The sale involves RBC branches in Antigua, Dominica, Montserrat, St. Lucia, and St. Kitts and Nevis, as well as regional businesses operating under RBC Royal Bank Holdings (EC) Limited in Nevis, Grenada and St. Vincent and the Grenadines.
The consortium acquiring RBC’s Eastern Caribbean operations includes five regional banks: 1st National Bank St. Lucia, Antigua Commercial Bank Ltd., National Bank of Dominica Ltd., the Bank of Montserrat and Bank of Nevis Ltd.
Johnathan Johannes, managing director of 1st National Bank St. Lucia, said the consortium was formed to expand the scale of the locally owned financial entities in the Eastern Caribbean Currency Union. In a press release, he said: “This transaction gives us the size and scale to play a more active role in the development of our respective countries. We see this transaction as the first step in achieving even greater synergies, efficiencies and cross-territory marketing opportunities.”
Wilfred Baghaloo of PwC Jamaica, who advised the consortium, said the transaction demonstrates that “Caribbean countries and businesses have the capacity and capability to come together when the circumstances are right”.
Canadian banks have been steadily reducing their footprint in the Caribbean region in recent years.
Last year, Scotiabank blamed increasing regulatory complexity and continued necessary investment into IT infrastructure for its decision to focus on large-scale markets and sell operations in nine smaller countries in the Caribbean to Trinidad-based Republic Financial Holdings.
In November, Canadian Imperial Bank of Commerce reached an agreement to sell a controlling stake in its Caribbean entity, FirstCaribbean International Bank, to GNB Financial Group.
Rob Johnston, the head of RBC Caribbean Banking, said his bank had been approached by the consortium of banks earlier this year.
“After a review of our operations and strategy, we determined this opportunity was a good decision for the long-term future success of RBC Caribbean, and also that it aligned with our vision to help our clients thrive and communities prosper,” he said.
Johnston said RBC had operated in the Caribbean for more than 100 years, longer than in many parts of Canada, and that RBC would remain committed to the future of the Caribbean.
“This transaction will allow us to realign and focus our strategy on Caribbean markets where we can achieve that vision most successfully,” he added.
Financial terms of the transaction were not disclosed. RBC will release its first-quarter 2020 results and host an earnings conference call on 21 Feb. 2020.
Related Videos
