Mar 05, 2021 News
Kaieteur News – Following Wednesday’s announcement by Scotia Bank of an agreement of sale of its Guyana operations to Trinidadian company First Citizens Bank Limited (“First Citizens”), the Bank of Guyana (BOG) has come out to state that First Citizens does not have a licence to operate here.
BOG noted, that First Citizens published a notice in the Trinidad Guardian on its decision to enter into a purchase and sale agreement with the Bank of Nova Scotia (BNS) to purchase its operations in Guyana.
However, BOG stated that First Citizens entered the said agreement without informing them prior.
“FCB does not have a licence to operate in Guyana. FCB has not submitted an application, in keeping with the requirements of the Financial Institutions Act 1995 (FIA), to the BOG to acquire control of a bank (BNS) operating in Guyana,” the BOG said in its statement.
Scotia Bank had announced that it reached an agreement for the sale of its banking operations in Guyana to First Citizens Bank Limited (“First Citizens”).
However, shortly after the announcement, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, made it clear that the deal, thus far, has not received government’s blessings.
In essence, Dr. Singh said that no approval has been granted by the Bank of Guyana (BOG). He has deemed Scotia Bank’s announcement “premature and inappropriate.”
Dr. Singh explained that 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 (FIA) 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 Senior Minister added.
Meanwhile, Scotia Bank said in its statement, that the transaction supports the Bank’s strategic decision to focus on operations across its footprint where it can achieve greater scale and deliver the highest value for customers. Scotia Bank’s current operations in Guyana encompass four branches and approximately 180 employees. Following closing, it informed, all employees would continue to support the business.
First Citizens is one of the leading financial services group 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, Scotia Bank said, 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, the Scotia Bank statement assured that operations in Guyana would continue as usual. In the meantime, it noted that First Citizens and Scotia Bank will work together to facilitate a smooth transition for the business.
A point to note though is that this is Scotia Bank’s second attempt in recent times to sell off its operations.
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