By Carl Joseph
Friday officially signaled the start of the official countdown to the closure of the acquisition the Royal Bank of Canada (RBC) Caribbean branches to a regional consortium of banks to include the Antigua Commercial Bank (ACB).
Last Thursday, the banking consortium consisting of the ACB, First National Bank St. Lucia, National Bank of Dominica, the Bank of Monserrat and the Bank of Nevis all announced their intention to acquire the branches that comprise Royal Bank Eastern Caribbean.
The consortium representatives held a joint press conference to officially sign the agreement between both entities.
Representative speaker for the regional consortium, Dalton A. Lee expressed, “When we saw RBC, we felt it as a good fit with our own businesses… After looking at several other options, we felt that RBC was the perfect choice.”
While the Royal Bank has agreed to sell their assets to the various islands, the transaction still awaits the approval of the Eastern Caribbean Central Bank (ECCB) and the individual monetary councils in each state.
“As indigenous banks, we always look for opportunities to grow, not just in terms of assets but in terms of skill sets and capacity and surveying the landscape to look for new opportunities is something we always do,” said the managing director of First National Bank St Lucia, Johnathan Johannes.
The sale encompasses seven branches of Royal Bank of Canada (Antigua, Dominica, Monserrat, St. Lucia (two locations) and St. Kitts and Nevis (St. Kitts two locations), as well as the regional businesses operating under RBC Financial (Caribbean) Limited (“RBCFCL”); specifically RBTT Bank (SKN) Limited (Nevis), RBTT Bank Grenada Limited (Grenada) – two locations, RBC Royal Bank Holdings (EC) Limited (St. Vincent and the Grenadines) and RBTT Bank Caribbean Limited (St. Vincent and the Grenadines). Collectively, these operations are referred to informally as “RBC Eastern Caribbean”.
The St Vincent RBC branch will be wholly acquired by First National Bank St Lucia. The assets of the Grenada RBC branch will be shared equally among the members five consortium banks.
When asked the overall cost for the acquisition of the Caribbean branches, RBC’s head of Caribbean Banking, Rob Johnston choose to not disclose that figure at this time choosing rather to say, “it’s quite complex… because everyone has a different portion of the actual transaction.”
Johnston did say, however, that the financial details surrounding the acquisition would most likely occur during the banks’ first quarterly reporting.
Johnston appeared bullish at the consortium’s prospects for increasing the newly acquired assets going forward saying, “I am very excited about the future of financial services in the Eastern Caribbean and more bluntly in the region.”
He added that, “I think the first place you’ll see progress… would be through the auspices of the Central Bank. The governor is working along with a number of the indigenous banks to build out a backbone of services and supports.”
Johnston sought to quell fears that the exit of the Canadian-owed entity meant a lack of confidence by Canadian bankers in the financial viability in the Eastern Caribbean banks: “
According to the international banker, “each of the indigenous banks already has correspondent banking. And I would imagine that there will be no change, if not larger, relationships going forward… potentially with new dimensions.”
The consortium could not give a definitive date for complete acquisition of RBC Caribbean, but did seek to reassure existing RBC employees concerning their future employment status.
The consortium’s representative speaker and Chairman of the Bank of Montserrat Dalton A. Lee said that there has been no decision made on existing Royal Bank employees.
“None of those decisions have been made at this time… because we are not in a position to make those types of decisions because we don’t know the employees that we will be adding to our rosters because they are not our employees at this time. They are RBC’s employees.”