Following Scotiabank’s announcement that it has sold its operations in Guyana to First Citizens Bank Limited (FCB), the Bank of Guyana (BoG) has stated that the Trinidad-based commercial bank does not have a licence to operate here.
FCB recently published a Notice in the Trinidad Guardian on its decision to enter into a purchase and sale agreement with the Canada-based Bank of Nova Scotia (BNS) to purchase its operations in Guyana.
This was confirmed in a statement by Scotiabank Guyana on Wednesday, in which it said that the agreement is subject to regulatory approval and customary closing conditions.
However, Central Bank in a statement on Thursday said not only did FCB and Scotiabank entered the agreement without informing the BoG, the Trinidadian bank 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 brief missive from the Central Bank detailed.
In fact, Governor of BoG, Dr Gobind Ganga, told this publication on Thursday that Scotiabank has to get permission from the Bank of Guyana before it proceeds to enter into any agreement to sell its operations here in accordance with Section 12 of the FIA.
“They can’t sell, transfer or anything before the get permission from the Bank of Guyana. That’s a requirement… Their sale is subject to our approval,” Dr Ganga contended.
This, he explained, is to allow for the Central Bank to conduct the necessary mandatory assessments of the transaction including, in this case, the company seeking to enter Guyana’s banking market.
“Even if [FCB] submit an application in the near future, we have do our assessments with respect to the requirements and those requirements include our objectives, in terms of what we need from another financial institution entering the Guyana market,” he explained.
Dr Ganga made reference to Scotiabank’s previous attempt to sell its operations in Guyana to Republic Financial Holdings Limited, which was halted after the BoG – having done its assessment – found that if the transaction had gone through with RBL, which is already operating in Guyana, then it would have jeopardise the local market.
“So as you can see, we have to do our assessment from different perspectives… Any applicant will have to judge with respect to the merit of the application from the perspective of our requirements and our objectives going forward,” he contended.
Nevertheless, the BOG Governor went onto revealed that they received correspondences today from Scotiabank Guyana basically detailing what was mentioned in its public statement on Wednesday.
“They indicated to us that they have this agreement of sale with First Citizens, and they’re applying with respect to Section 12 of the Financial Institution Act to execute the sale but we cannot execute a sale unless we know for sure [about the transaction and the company buying the operations here],” Dr Ganga stated.
On this note, the Governor said that the BoG will soon commence the assessment of transaction.
Notwithstanding, he noted that Scotiabank plays an important role in Guyana’s banking sector and by extension the country’s economy.
“I hope that will continue until such time we determine what will happen with respect to the sale,” Dr Ganga posited.
In its missive on Wednesday, Scotiabank did indicate that until regulatory approvals are obtained and the transaction closes, it will continue operations in Guyana “as usual”.
Scotiabank’s Guyana operations currently encompass four branches and approximately 180 employees. The Canada-based bank noted that these employees will all be retained upon the transfer of operations to First Citizens.
Headquartered in the Republic of 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.
Meanwhile, the announcement of the sale between the two banks has been described as premature and inappropriate by the Guyana Government.
“I wish to say that the Government of Guyana considers it extremely unfortunate that this transaction was announced, considering that any such transaction is subject to a specified regulatory process… We consider it premature to announce a transaction of this nature, particularly given that the regulatory process to consider the request for such a transaction is yet to be initiated, much less concluded,” Senior Minister with responsibility for Finance, Dr Ashni Singh, said on Wednesday.
Scotiabank has, for some time, been looking to sell its operations in Guyana and in 2019, had its application to sell to RBL denied by the BoG.