A consortium of Eastern Caribbean indigenous banks Thursday said it had entered into a “definitive agreement” to purchase all banking operations of the Royal Bank of Canada (RBC) in the Eastern Caribbean.
“Consistent with our strategy of being a competitive leader in the markets where we operate, RBC is always evaluating opportunities for our business. Earlier this year, we were approached by a consortium of indigenous banks with their proposal to acquire all RBC Eastern Caribbean operations,” said Rob Johnston, Head, RBC Caribbean Banking.
“After a review of our operations and strategy, we determined this opportunity was a good decision for the long-term future success of RBC Caribbean, and also, that it aligned with our vision to help our clients thrive and communities prosper,” he added.
RBC said will release its first quarter 2020 results and host an earnings conference call on February 21, 2020
In a statement, the consortium, which did not disclose the terms of the financial transaction, said that the transaction is subject to regulatory approval and other customary closing conditions, and is expected to be finalized in the coming months.
The five financial entities participating in the sale are: 1st National Bank St. Lucia Limited, Antigua Commercial Bank Ltd., National Bank of Dominica Ltd., the Bank of Montserrat Limited and Bank of Nevis Ltd.
“We formed the consortium for the express purpose of expanding the scale of the locally owned financial entities in the Eastern Caribbean Currency Union,” said Johnathan Johannes, managing director of the 1st National Bank St. Lucia Limited, who led the consortium.
“This transaction gives us the size and scale to play a more active role in the development of our respective countries. We see this transaction as the first step in achieving even greater synergies, efficiencies and cross-territory marketing opportunities,” he added.
Chairman of the board of director of the National Commercial Bank of Dominica, Anthony John, said “we are proud and pleased that we as a group of small islands came together to pursue this momentous deal for the benefit of all of our stakeholders.
“We see this as a significant milestone in the life of our bank as we continue to grow in a way that will allow us to better serve our customers. There are no plans for any immediate changes to the operation of the business/branches that we are acquiring. In addition, where possible, we will adopt best practices of RBC to ensure we maintain the very high quality service levels that RBC customers have come to expect,” he said.
The statement said that the sale encompasses seven branches of Royal Bank of Canada in Antigua, Dominica, Monserrat, St. Lucia St. Kitts-Nevis as well as the regional businesses operating under RBC Financial (Caribbean) Limited (RBCFCL); specifically RBTT Bank (SKN) Limited (Nevis), RBTT Bank Grenada Limited (Grenada), RBC Royal Bank Holdings (EC) Limited and RBTT Bank Caribbean Limited (St. Vincent and the Grenadines).
Johnston said RBC has operated in the Caribbean for more 100 years, “longer than we have been in many parts of Canada.
“We remain committed to the future of the Caribbean and to a vision of digital innovation that transcends traditional services. This transaction will allow us to realign and focus our strategy on Caribbean markets where we can achieve that vision most successfully.
“Self-determination is the highest level of empowerment – and the indigenous banks acquiring this business will now have an increased opportunity to influence the development of their communities,” Johnston added.
Johannes said that “speaking on behalf of the local banks, we embrace and eagerly anticipate that opportunity.”
The consortium was advised by PwC (JA) led by Wilfred Baghaloo, who said “this transaction demonstrates that Caribbean businesses have the capacity to come together when the circumstances are right”.