Bank of Nova Scotia has reached a deal to sell its operations in the British Virgin Islands as the Canadian bank continues to shrink its Caribbean footprint.
The buyer is Republic Financial Holdings Ltd. (RFHL), the Trinidad and Tobago-based owner of Republic Bank, which has branches across the region. Terms of the deal were not disclosed, and it is still subject to regulatory approval and closing conditions.
Only four weeks ago, Scotiabank closed a separate agreement with RFHL to sell its banking operations in seven Caribbean countries, including Grenada and St. Lucia. But Scotiabank’s plans to offload its assets in Antigua and Barbuda as well as Guyana as part of the same transaction fell through after politicians and regulators blocked both deals.
In Antigua, Scotiabank has been caught in a bitter standoff with the local government over Prime Minister Gaston Browne’s insistence that local buyers be given first right of refusal. And Guyana’s central bank denied Republic Financial’s bid to buy Scotiabank’s Guyanese assets because of concerns over concentration and competition.
A Scotiabank spokesperson declined to comment on the British Virgin Islands sale, and Republic Financial Holdings could not immediately be reached for comment.
Withdrawing from British Virgin Islands is the latest small step in Scotiabank’s larger plan to focus its international banking ambitions on Latin America, while reducing its exposure to high-risk jurisdictions and freeing up capital to spend elsewhere. The bank has also sold banking operations in the Dominican Republic, El Salvador, Thailand, Puerto Rico and the U.S. Virgin Islands, and pared back its assets in Asia.
Other Canadian banks have also been rethinking their investments in the Caribbean. Canadian Imperial Bank of Commerce recently struck a US$797-million deal to sell control of Barbados-based CIBC FirstCaribbean International Bank to GNB Financial Group Ltd., a company controlled by Colombian billionaire Jaime Gilinski Bacal.
Scotiabank’s history in the Caribbean goes back to 1889, and the bank still has a significant presence in countries such as Barbados, the Bahamas and Jamaica. In the 2019 fiscal year, which ended Oct. 31, Scotiabank reported $3.3-billion in revenue from the Caribbean and Central America, which made up 24 per cent of the bank’s total revenue from international banking.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
James Bradshaw