Following the recent announcement from the Bank of Baroda that it will be pulling-out from Guyana’s shores, the India-based, State-owned entity is mounting a similar move in two other countries: neighbouring Caribbean nation Trinidad & Tobago and Ghana, a West African country.
In a report by Economic Times on Monday, it was outlined that the institution will close the three of 165 branches by June 2019. As per a regulatory filing, it stated that the closures will “increase in efficiency and profitability of the overseas offices”.
The international media agency reported that the branches in the three countries only contribute less than one percentage to Baroda’s overall earnings.
Guyana revenue was listed as 26,380,000 Rupees (US$ 363,000); while Trinidad & Tobago’s was 23,900,000 Rupees (US $334,000).
Meanwhile, Ghana’s revenue at the bank was 75,000,000 Rupees–just over US $1 million.
The Economic Times noted that the bank did not specify the period in which the revenue was generated.
On December 7, it was reported that the Bank of Baroda, had taken steps to sell its operations here.
According to the Financial Express, the banking institution is looking to divest its entire 100 per cent stake in its Bank of Baroda Guyana Inc subsidiary through investment bankers.
The bank is now seeking bids from investment bankers to help find a buyer. It has asked for technical and financial proposals by the end of this year.
The bank’s pull-out was the subject of much expressed worry by the Opposition People’s Progressive Party (PPP) wherein it contended that the Bank of Baroda’s exit indicated a lack of confidence in Guyana’s economy. Former Attorney General Anil Nandlall recently told the National Assembly that commercial banks are a well-known barometer by which one can judge an economy’s performance and therefore urged the country not to turn a blind eye when banks are suddenly packing up shop and leaving.
However, Finance Minister Winston Jordan contended otherwise, having stated that the impending pull-out from the local market was known to the Government. He said that having to deal with FATCA (Foreign Account Tax Compliance Act) and the AML (Anti Money Laundering) laws; the international institutions do not consider our territories to be profitable anymore.
The move by the Indian bank came just one week after the Canadian-based Scotiabank announced that it has signed an agreement to sell its banking operations in Guyana and eight other Caribbean nations to Republic Financial Holdings Ltd, a deal worth some US$123 million.