Prime Minister Gaston Browne says the Antigua and Barbuda government will not be held responsible for any run on Scotiabank as he reiterated his administration’s position in not providing a vesting order to facilitate the sale of the financial institution to Trinidad-based Republic Financial Holdings Limited (RFHL).
“What if there is a run on the bank? Whose problem is it? It will be the problem of Scotia Canada who will have to spend millions of dollars to fix the problem. If Scotiabank fails to provide some form of local participation then whatever happens to the branches here and the Caribbean is their problem,” Browne said at a ceremony in memory of the island’s first prime minister, V.C. Bird.
“I say here, we cannot be a coward people. When Sir Vere Cornwall Bird Senior and the 39ers were fighting the planter class they had to get involved in unconditional activities in order to fuel change.
“I say publicly without any fear of contradiction, that if Scotiabank fails to provide some form of local participation then whatever happens to the branch here and in the Caribbean that is their problem,” Browne told the audience.
A RFHL statement said that the banks being acquired are located in Guyana, St. Maarten, Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.
It said that the purchase price is US$123 million, which represents US$25 million consideration for total shareholding of Scotiabank Anguilla Limited; and a premium of US$98 million over net asset value for operations in the remaining eight countries.
The Suriname-based CARICOM Competition Commission (CCC) says any impact the proposed acquisition of Scotiabank by the RFHL will be assessed in accordance with the Revised Treaty of Chaguaramas (RTC) that governs the regional integration movement.
Antigua and Barbuda and Guyana have expressed reservations about the proposed acquisition, with St. John’s indicating that it would not be issuing a vesting order to facilitate the move.
Browne told the ceremony that also coincides with the birthday of V.C. Bird that the government was standing firm on its position that no vesting order would be granted unless a consortium of local banks is given the first right of refusal to acquire the bank’s operation in the country.
“We will not be issuing the vesting order unless we get a deal that is satisfactory to us. In that case they will have to go to court because we will not voluntarily do it,” Browne said, adding “we are doing so to ensure that we can get a piece of the pie, to build resilience within the indigenous banking sector to make our banks stronger.
“One of the reasons why our bank is not stronger is because we don’t have the type of economies of scale, the size and the scope.”
The St. Kitts-based Eastern Caribbean Central Bank (ECCB), which serves as a central bank for several countries in the Organisation of Eastern Caribbean states (OECS) including Antigua and Barbuda, has urged citizens and residents of the sub-region to remain calm, in light of the proposed sale.
The ECCB confirmed it had received an application from Republic Financial Holdings “seeking regulatory approval to acquire the Bank of Nova Scotia’s operations and businesses in the Eastern Caribbean Currency Union (ECCU),” and that it has since commenced a review of this application, pursuant to the Banking Act.”
